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The market is expected to remain volatile in the trucated week as traders will roll over positions in the futures & options (F&O) segment from the near month December 2013 series to January 2014 series. The near month December 2013 derivatives contract expire on Thursday, 26 December 2013.
"Nifty future has been trading in a range, it had recovered from 6150 levels but finding supply around 6320 to 6335 zone. Max Call OI is intact at 6300 strike and because of that pressure seen at every rise above 6300 levels. Nifty future has seen rollover of around 55% with better roll cost which is a sign of overall positive trend for the market. Traders can play in Bull Call spread to catch the market momentum with limited risk in next series," says Chandan Taparia, Derivative Analyst, Anand Rathi Financial Services.
Markets continue to trade flat, one trading session ahead of the expiry day. The 30-share BSE benchmark index -- Sensex is trading with a negative bias at 21,098 and the Nifty was up three points at 6,288. Weakness in HDFC group stocks is keeping the gains in heavyweights like L&T, Infosys and RIL under check.
Meanwhile, the broader markets stepped up with the smallcap index gaining over 1% and the midcap index adding 0.6%, both outperforming the BSE benchmark index.
What should be the strategy to invest given the festive season ahead and F&O expiry, tells Devangshu Datta.
SmartInvestor: Its a lacklustre day ahead of F&O expiry on Thursday. What are the levels to check out on benchmarks?
Devangshu Datta: Stop shorts at nifty 6350 and stop loss positions at nifty 6250
SmartInvestor: How do you expect the roll-overs into January series to be ?
Devangshu Datta: Average to low. FIIs will generally be switched off since this is finance year end for many of them. The holiday tomorrow could lead to a bunch up on settlement day with a lot of volatility in the last two hrs of the settlement.
SmartInvestor: What strategy will you suggest ahead for December series F&O expiry day?
Devangshu Datta: In the absence of any clear short term trend developing, hold your positions until and unless stop losses are hit. January could be a big settlement. Fiis will have to factor in tapering to their Emerging Market allocations.
SmartInvestor: Your outlook on broader markets with a medium term perspective?
Devangshu Datta: As of now, the market is in a intermediate/ long-term bull market trend. Keep trailing stop losses and be inclined to stay long until such time as the trend changes
SmartInvestor: Your top bets for the festive season?
