Rollover Analysis. Bulls are in the Driver’s Seat: Edelweiss

Bullish momentum which spilled over from October series in the form of short covering was held intact as bulls were unperturbed by any worries on global front. November series also witnessed fresh All time highs being registered on a closing basis. Bullish sentiments were distinctly visible as participants were confident of rolling over their bullish bets which was evident in high roll cost in Nifty. Last time Nifty had witnessed such a high roll cost was way back in September’20 series.

Nifty rollovers were above average at 82% (v/s 3-month average of 79%) with roll cost at 0.77%. Bank Nifty rollovers were higher at 88% (v/s 3-month average of 82%) with roll cost at 0.48%. On an absolute basis, rollovers in Nifty were above average (rollovers stood at ~1.21 cr shares v/s 3-month average of 1.17cr). Absolute rollovers in Bank Nifty were higher than average (rollovers stood at 0.3291cr v/s 3-month average of 0.2147cr).

Market-wide rollovers were inline at 92% with the 3-month average rollovers at 92%.

Banking: Sector has witnessed higher than average rollover (93% Vs 3-month average of 92%), Within the sector PSU Banks have shown signs that positions have been lightened except for SBI. Within the Pvt Banks, HDFC Bank, ICICI Bank & Indusind Bank have witnessed Long Buildup.

IT: IT sector has witnessed rollovers lower than average (93% Vs 3-month average of 94%). Sector leaders like Infy and TCS have seen Short Covering. HCL Tech and Wipro have seen Long Buildup amongst the larger names. Midcap IT stocks have seen Long Buildup in names like LTI, LTTS, Birlasoft & Coforge.

Energy: Sector witnessed lower than average rollovers (91% Vs 3-month average of 92%). OMC’s have witnessed Long Builudp with OI rising in BPCL, Hind Petro and IOC along with a rise in price. Players in the Gas space like GAIL and Petronet have also witnessed Long Buildup.

Apart from these sectors, Pharma sector could see some Short Covering as the sector is in oversold zone and stocks like Apollo Hospital, Sun Pharma & Torrent Pharma have witnessed Long Buildup. Abbot India has also witnessed Short Covering and could be a good candidate if Short Covering continues.