By Anand James
Last week the stock market closed with a jaded look. The markets had to shoulder the burden of a roaring up move that appeared as a relief rally to some, while some viewed it as the start of a new bull phase. Or even better, an end to a bear market correction. Whichever way one was to look at it, rejection trades emerged across the board. However, it was also evident that bulls never left the scene, as Thursday’s sharp upmove stubbed out the start of a down move that was signalled by an evening star, a three-candle stick bearish reversal pattern. Let us see how the stock market is poised for the next week.
FIIs’ short covering was not an expiry-led event alone.
Throughout the week, and post-expiry, FIIs continued to hold at least 30% or more of their index future position as long as possible, a far cry from the sub-20% levels seen early this month. As noted last week, 30% is our benchmark which marks a shift towards the phase of uptrend in Nifty on the back of anticipated short covering. The index future long proportion closed the week at 35%, suggesting that the short covering witnessed late last week was not purely induced by derivatives expiry alone. We remain hopeful towards more addition in index future longs.
ALSO READLarger Nifty upside yet to unfold. Here’s what to watch out for… Expiry Insights
Nifty’s rollovers for March stood at 76.09%, falling short of the 3-month average of 80.15%. Bank Nifty’s rollover was 76.98%, down from 81.64% in February. In March, an impressive 78.50% of stock futures ended positively, a dramatic rise from February’s 17.06%. This figure is also significantly higher than the 45% positive closing rate observed in March 2024.
The highest rolls were seen in RBL, Crompton Greaves, Mahanagar Gas, Infosys, and Tube Investment of India while the lowest rolls were seen in DMart, HCL Technologies, Phoenix, and Bajaj Finserv. Sector-wise, Consumer Durables, Auto, Power, and Infrastructure saw the highest rollovers, while Oil & Gas had the lowest. We saw the highest long buildup in Cement, Oil & Gas, Realty and Power signalling optimism in these industries.
Nifty IT making a ‘U’ turn
The Nifty IT Index has been declining since Dec 2024 and has taken support around the widening wedge pattern support in the weekly scale maintaining the upward trajectory intact.
» Read More
