By Anand James
Nifty 50 ended the December series on a negative note with software & services being the biggest laggard followed by oil & gas. Pharma was the best-performing sector followed by transportation and telecom this month. Nifty’s rollover for December was 77.66%, surpassing the 3-month average of 76.62%. Bank Nifty’s rollover was 67.81%, down from 76.82% in November. In December, only 36.5% of stock futures closed positively, a decrease from 39.9% in November, whereas December 2023 saw a significantly higher positive closing rate of 87%.
The highest rolls were seen in Bharti Airtel, United Spirits, SRF, and ICICIGI while the lowest rolls were seen in Coromandel, IGL, and UBL. Sector-wise, transportation, oil & gas, and consumer durables saw the highest rollovers, while media, retail, and realty had the lowest. We saw the highest long buildup in realty, cement and pharma indicating optimism. Meanwhile, FIIs are holding very few index futures contracts as long, almost the lowest in 2024, pointing towards a wait-and-watch approach, as we move into a new year, as well as earning season.
Momentum missing
Bucking the historical trends, we have had a difficult December, though the last week has been full of hope. Nevertheless, we are backing historical trends to repeat, as we go into the last couple of days of the calendar year, with expectations of low volumes and lacklustre moves. That said, the favoured view continues to expect the full achievement of 24165, which we have been eying since early last week, despite the soft close last Friday. Alternatively, a direct fall past 23600 could expose 23440, but a collapse past the recent low of 23263 is not expected. While we had limited our near-term upside view to 24165 last week, we would be favouring continued rise to 24600, should pull back attempts post-testing 24165 are limited to 23800.
Bank Nifty gearing up for an upmove
Multiple attempts to overcome 51500 faced rejections last week, but we see this as natural and an unavoidable phase en route to a stronger leap in the next week or so. We are eying 51900-52100 in the first upswing and 53300, if optimism prevails. Consolidation in the next couple of days is not ruled out, but we will keep the vigil with a downside marker at 51000, waiting for a strong up move.
Pharma stocks look to continue upside
The Nifty Pharma Index saw the beginning of a reversal in November and the same has been gaining strength since then.
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