After three consecutive series of lacklustre performance, March finally saw a blockbuster closing with the Nifty rising 7.2 percent -- the highest since January 2015.
Massive inflows from foreign investors (FIIs), expectations of a stable government at the Centre and stellar rally in the banking pack contributed to the Nifty's rise.
Looking at the rollover data, analysts feel that the momentum is likely to continue in the April series as well and that the index may attempt to take out 12,000 levels.
Rollover in the Nifty was 66.73 percent compared to a three-month average of 62.94 percent. The market-wide rollover stood at 85.4 percent compared to its three-month average of 85 percent.
Among heavyweights, automobile and financials are starting the new series with high open interest. While traders continue to remain short on auto stocks, financials are seeing accumulation of fresh longs, say experts.
“Long rollovers in the Nifty and Bank Nifty (17 percent lower open interest from its all-time high of 523 crore shares) augurs well for the market. Long rollover by FIIs’ in index futures and Put writing at 11,200-11,300 levels indicates that one should remain optimistic in the April series too,” Nandish Shah, Analyst, HDFC Securities told Moneycontrol.
That's the reason why Shah advises investors to accumulate long positions on declines with the stop-loss at 11,200 levels. On the higher side, he sees immediate resistance around 11,800 levels.
The rollover data suggests that the bulls are here to stay and 12,000 levels or at least record highs are not far off. The Nifty hit a record high of 11,768 on August 28, 2018, and the index is just 145 points, or 1.2 percent, away from those levels.
Given the fact we are trading near record highs, experts see a higher possibility of the market consolidating at higher levels and recommend that investors remain stock-specific.
“In the April series, we may see the first line of defence for the bulls near 12,000, with support placed near 11,300 levels. We may see a tight consolidation in this range, but stock-specific action may continue on Dalal Street,” Dyaneshwar Padwal, AVP Technical Analyst, KIFS Trade Capital told Moneycontrol.
He too advises traders to look for 'stock-specific action' rather than take directional views on the indices. "In this scenario, midcaps may outperform key benchmark indexes.”
Stocks which saw high rollovers include Wockhardt, Oracle Financial Services Software , United Breweries, Gujarat State Fertilizer & Chemicals, IDBI Bank, Ceat, South Indian Bank, India Cements, Hexaware Technologies and Godrej Industries.
Those that weak rollovers include Britannia Industries, HDFC Bank, Amara Raja Batteries, L&T, GAIL (India), Kotak Mahindra Bank, Power Grid Corporation of India and JSW Steel.
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