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Rollover Analysis : Nifty defends 16900, sustenance imperative for rally to set in by Yes Securities
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Strategy
Buy Bank of Baroda 165 strike call option near 5.5 Stop loss: 1.5 Target: 14
Rationale:
Post multi?month decline, Bank of Baroda found support near 155 and has regained momentum on upside. ? The stock rallied in the March series with rollover 95%
Sector wise positioning:
* During recent consolidation, Nifty managed to defend levels of 16900 on closing basis. However sustenance above 17200 is key for a sustained rally to set in till 17500.
* Oil & gas space saw an increase in Open interest base. MGL witnessed a long build?up with rolls 95%; the stock is expected to trend higher till 1070?1100 zone.
* Cement stocks largely trended up. Stocks like JKCement and Dalmia Bharat rallied amid long buildup/short covering; throwbacks should be considered as a buying opportunity given continued out?performance likely.
* Pharma index ended lower for the straight fifth series, yet short term bounce is expected in the Pharma index due to oversold reading on short term charts. Stocks like DrReddy and Glenamrk are likely to trend north.
* IT stocks largely remained weak, IT stocks are likely to consolidate from here on, as any major move on either side in unlikely.
This month, US markets have been consolidating above support zone, while Dollar index, after having failed to sustain higher levels, reverted to levels of 102 on the downside.
March series Highlights a) Nifty lost 2.5% eoe, down for the straight fourth series. b) BankNifty turned choppy but managed to out?perform the Nifty C) IT and Auto indices were among the key draggers (down 8/7% eoe). d) Sectoral trends were largely negative; however, FMCG index consolidated at upper band. e) Midcap 100 index ended lower, but out?performed the Nifty.
Rollovers for Nifty/Bank?Nifty stood at 74% (~1.14cr OI)/93% (~50.5lakh OI) vs 73% (~1.13cr OI)/65% (~28lakh OI) of the prior month. Nifty/BankNifty’s open interest base grew 21/80% eoe respectively. FIIs’ remained net seller on index futures, as long/short ratio seen at 0.10 vs 0.24 on February expiry
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