Shorts are being carried forward

F&O OUTLOOK

Traders are booking profits at every rise. The Nifty February futures contracts closed at a discount of 11 points, indicating that shorts were carried forward even a day ahead of expiry.

The market wide rollovers picked momentum on the penultimate day of February series expiry, with 60 per cent positions being rolled over compared to 51 per cent yesterday. The rollovers have been above average compared to the previous months, with short positions being carried forward aggressively.

The Nifty's close of 5,268, after a convincing move above 5,350, is a sign of weakness. The Sensex continues to face resistance around the 18,000-18,300 band and only a close above the upper limit can cancel the current downtrend. On the flip side, a close below 17,500 would accelerate the downtrend.

The rollovers in Nifty futures were 69 per cent, up from 54 per cent yesterday. The rollovers in stock futures went up to 62 per cent from the previous day's 49 per cent.

The rollover in Nifty March futures continues to be at discount, which shows that shorts have been rolled over. The average rollover cost remains around 50-60 basis points or 6-7 per cent on an annualized basis.

The Nifty March PCR moved down to 1.74 from 1.79. The March Put options open interest increased by 6.38 lakh shares, while that of Call options rose by 4.37 lakh shares.

The Nifty 4800 and 5000 Put options added noteworthy open interest, indicating support for Nifty at these levels. The 5300 and 5500 Call strikes witnessed a build-up in open interest, which is a sign of resistance.