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Below is Quote on Weekly Technical Outlook from Anand James, Chief Market Strategist,Geojit Financial Services

On the expiry day, 42% of the total index future OI was held by the FIIs, and among the FII holdings 87% of the index future positions were as shorts improving the case of short covering. However, such extremes have been persistent for sometime now, and hence we are not encouraged to play a vertical rise, purely on the basis of potential short covering by FIIs. Among the sectors, Oil, IT and banks contributed to 87% of the Nifty’s fall in the September series. Short build up was seen in Realty, Energy, Chemical, Media and Metal. Short covering was seen in Healthcare & Cement stocks while Long unwinding was seen in Telecom space.

Market wide rollover declined to 88.6% (vs 91.8% last expiry), with rollovers of stock, Nifty as well as Bank Nifty declining to 88.7%(vs 91.9%), 78%(vs 82.3%) and 82% (vs 83.4%) respectively. The rollover figures have healthy suggesting that the bearish views prevailing in the run upto the expiry were persisted with, which may be largely due to the RBI event, scheduled just a day after the expiry. The other interpretation is that this makes up for potential for upside surprise, with the covering of bearish views that have been rolled over, giving muscle to strong upsides. However, it may be noted that the sharp rise after the RBI rate decision managed to lift only 20% of the f&o stocks above the expiry day’s respective peaks. This suggests a delay in the onset of short covering, or a potential turn lower in the first week, prompting us to wait for atleast a day’s close` above 17170 before committing firmly to the upsides aiming 17300/450. But such an approach would fully disregard the vertical rise that Friday witnessed. To give a fair acknowledgement to this, upswings may be played on dips early in the week as long as 16980/50 is intact. Once below, look for 16300.

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