What April’s FII rollover data of Nifty and sectoral indices indicate for the May series in the markets?

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At 83%, Nifty’s roll over in April was which is greater than the three month average while Banknifty rollover at 79% was less than the same metric. The number of stock futures that moved up last month was greater than the average of previous three months.

FIIs hold 22% of market wide Index long position and 38% of the FIIs position in Index Futures segment were longs compared to overall FIIs position in the Index Futures. Highest rolls were seen in Chemical, Cement, realty, Auto, consumer durable and healthcare and among these sectors Cement, Auto and healthcare has a rollover greater than average of previous three months.

Banking Stocks contributed highest to Nifty’s upside with a contribution of 207 points. Metals, Telecom and automobile comes next with a combined contribution of 164 points. The sectors which dragged the Nifty are IT, oil and gas and infra with a combined contribution of 140 points.

Firstly, VIX is near 10, and does not warrant a huge trading range or major swings that could take directional intent. More importantly, directional moving indicators have softened, corroborating VIX’s signals.

Friday’s fall has refused to bend the Minus DI back up, suggesting that bearish momentum is missing, despite the week’s close suggesting otherwise. We are inclined to give more weightage to the ADX’s signals and stay on the sidelines.

Traders, however, will find opportunities, as we see Nifty swinging about three percentage, but less likely to anymore, on either side of 22300, without taking off in any direction, for a week or so.

First published in FE

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