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Traders punting on Nifty advancing to 15,600-15,800 in June series

Mumbai: Traders carried forward their bullish derivative bets to the June F&O series on expiry of the May contracts on Thursday on expectations stock indices are likely to sweep past their record highs in the coming weeks. With Covid-19 cases expected to decline in June and July, analysts said traders are punting on the Nifty advancing to 15,600-15,800 levels in the June series Nifty rollovers stood at around 77%, higher than the average of the last three months.

“Higher rollover compared to last 3-month average, rising putcall ratio and falling volatility indicate bulls are likely to hold command to take the indices to new lifetime highs,” said Chandan Taparia, derivative analyst at Motilal Oswal.

Banking and IT sector saw higher-than-average rollovers.

“Roll levels in heavyweights like

, and of around 54 bps (basis points) clearly reflected long aggression,” said Sriram Velayudhan, vice president alternative research, IIFL Securities.

Rajesh Palviya, head-technicals and derivatives at Axis Securities, is more bullish on the banking sector. “Banking sector is looking very attractive, PSU banks are still looking promising with SBI and PNB likely to move up another 5-10% in the short term,” said Palviya.

The Nifty has gained 8.3% from the low of 14,151.40 hit on April 22. The index had logged a record high of 15,431.75 on February 16 but a surge in Covid cases pulled the index down by over 1,000 points.

“There is still disbelief in this rally and people are waiting for correction to buy, which is not happening… data suggest upward momentum may continue but it will not move substantially higher, stocks-specific trades are giving greater returns and that should continue,” said Siddarth Bhamre, director-alternative investments and research at InCred Equities.

The Nifty gained 3% in the May series, Sensex gained 2.7% and the Bank Nifty gained 4%. Fear levels have receded as virus case count came down and there was improvement in recovery figures, with the volatility index, or India VIX, falling nearly 15% to 19.9 levels in May series.

The highest number of outstanding positions among Nifty June put options is at 14,000 strike followed by the 14,500 strike. On the call options side, 16,000 strike is where most of the open positions are concentrated followed by the 15,800 strike.

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