F&O tracker: Banks, infra stocks may drag market further

Rollovers in Nifty and BankNifty have been in line with averages, however, we have seen reduction in open interest in both the indices. FII's rollovers have been less than overall market in index futures. They seem to have done rollover around 61% in index futures compared to 68% in Nifty and 72% in BankNifty by overall market.

Options data for December series is quite scattered ember series is quite scattered as of now with 7500 and 8000 put strikes quite active where as in calls, 8000-8300 and 8500 built-up is evenly distributed.

Implied volatility is quite mod erate at 16.34% and would only increase from current levels as we enter into month of December which is again quite eventful with central bankers and their actions being talk of the town.

If we look at heavy weights and instrumental stocks from important sectors like banking and capital goods infrastruc ture like ICICI Bank, Axis Bank, SBI, L&T and BHEL to name a few, these stocks are showing weakness and have been adding short positions. These are the names which generally are responsible for prolong trend in markets.

Looking at the eventful month we are entering, we believe that implied volatility would increase and resistance of 8100-8150 is strong for markets. Also, strength in dollar is not at all liquidity positive. This market may show upside traction and may try to challenge resistance but may not be able to. This is so far sell on rise market with some support around 7700 levels.