F&O data hint financials likely to outperform in December

F&O traders rolled over more Nifty shares than their three-month average, but the rolls were lower than that of the previous month; while for the Bank Nifty the rollover from November to December was greater than the three-month average as well as that of October, signaling that the bank index could continue to outperform the bellwether index, according to Motilal Oswal Financial Services (MOFSL) analysis.“Nifty roll for November was 79.64 per cent against the three-month average of 75.31 per cent, but lower than 84.09 per cent for October, which suggests the positive momentum might continue but the pace of buying may slow,” said Chandan Taparia, derivatives analyst, MOFSL.

On the Bank Nifty, he added, the rollover was 70.56 per cent against the three-month average roll of 62.54 per cent and October’s 63.59 per cent .

“The Bank Nifty has seen better rolls than the three-month average or the previous month’s, indicating more strength in this rate sensitive index (than Nifty) for the December series,” said Taparia.


Stock-wise, better rollover has been witnessed in RIL, ICICI Bank, SBI, L&T FH, LIC Housing, UltraTech. These stocks could continue their upward move at the beginning of December series.

On an expiry-to-expiry basis, the Bank Nifty has outperformed the Nifty, rallying 6.84 per cent and settling the November series at a new life high above the 32100 zone, while the Nifty closed the series with the gains of 2.30 per cent. Nifty’s rally was driven by heavyweights like ICICI Bank, HDFC Ltd, Reliance, SBI, IndusInd Bank, Tata Steel, Bharti Airtel, etc. Most sectors contributed, except media and capital goods in this rally, while bottom formation was witnessed in beaten-down PSU and pharma counters.

Early positions formed in Nifty options indicate the market range for the December 26 expiry at 12000-12500. The 12000-strike put has open interest (OI) – outstanding position of traders – of 29.52 lakh shares (75 shares make one contract); while the 12500-strike call has OI of 16.98 lakh shares, provisional data indicate.

The Bank Nifty range, given by the fresh options data formed at the December series, is likely to be 32000-32200 and after that at 32500.

In terms of futures contracts, the Nifty starts the December series with OI of 1.47 crore shares compared with 1.49 crore shares in the November series. The Bank Nifty starts the December series with OI of 18.94 lakh shares (20 shares make one contract) compared with 8.08 lakh shares in the just concluded series.

Technical analysts said the Bank Nifty has been making higher highs-higher lows for the past seven weeks and till it holds above 31783, momentum could extend toward 32500 and then 33000 zones. The Nifty has recently given a consolidation breakout and a hold above 12000 could take it towards 12250 then 12400-12500 zones.