Nifty closed the December series with marginal loss of 0.20 percent as it settled at 12,126 compared to November close at 12,151 levels. It made a new life time high of 12,293, but comparatively remained rangebound for most part of the series between 11,832 and 12,293 levels.
Call and Put writers of 12,000 and 12,100 strikes were holding the grip in the market, and Option writers made best out of it. Index continued its winning streak of last three series and closed on a flat to negative note.
Nifty future has seen rollover of 61.74 percent with rollover cost of 0.55 percent which is lower to the last series roll of 79.64 percent.
Bank Nifty closed the series with marginal loss of 0.39 percent as it settled at 31,997 compared to November close at 32,122 levels. It made a new life time high of 32,502, but remained in broader range of 31,000 to 32,500 levels. It has seen rollover of 73.33 percent with rollover cost of 0.55 percent, which is higher than the last series rollover of 70.56 percent.
We have seen better rollovers in Bank Nifty while less rollovers in Nifty index which indicates more chances for financial to lead the momentum going forward.
Nifty index continued to make lower highs – lower lows for third consecutive session. It formed a Bearish Belt Hold candle on daily scale, which indicates dominance of bears for major part of the session. Despite the corrective move of benchmark indices, market breadth remained in favour of the advancing counters.
The momentum oscillator RSI is showing triple negative divergence and turned southward on daily chart, which doesn’t bode well for the bulls. Since index closed below its immediate support of 12,158 levels, further correction towards 12,050 – 12,000 zone cannot be ruled out. On upside, immediate hurdle is placed at 12,220 and 12,300 levels.
India VIX fell by 20.50 percent in this series and now at 11.12 which is lowest zones in last many months. Lower volatility suggests that declines could be bought in the market with limited upside as well downside at the beginning of new series.
Overall setup suggests that major support for the index placed at 11,800-11,900 levels while a follow up could lead it towards recent high of 12,300 then 12,500 levels towards the Union Budget which is going to be announced by the beginning of February 2020.
Stock-wise better rollovers were seen in Bajaj Finance, SRF, HDFC, JSW Steel etc while lacklustre move was seen in capital goods and cement counters.
(The author is Vice President | Analyst-Derivatives at Motilal Oswal Financial Services Limited.)Disclaimer: The views and investment tips expressed by investment expert on moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.