F&OTracker Market may be Highly Choppy on May Expiry
After soaring to new highs on election results day, the Indian market appears to have entered into a phase of consolidation for the time being. The broader indices remained choppy for the most part of the previous week as investors shuffled their portfolios following the election results. FIIs who have been net buyers since April 16, 2014, briefly turned net sellers for a few days last week. The big event is out of the way, but the market will be extremely choppy for the next few trading sessions on the back of May expiry.
Our market has ignored global market movement in the past 1-2 months; post May expiry, we might just see some global correlation returning to our market. During the expiry, maximum Nifty Option OI concentration was at 6,800 before exit polls, as against 7,000 and 7,200 during the previous week; now, the maximum OI concentration stands at 7,500 strike. The higher shift has been on account of a huge surge in call option OI; this could be speculative in nature. PCR at 0.80 levels shows an increase on a weekly basis.
Nifty futures has rolled over ~26% to the next expiry. Nifty futures OI over the past five trading sessions has jumped significantly. We believe most of the recent addition in OI is likely to be rolled over to the next series. So, rolls for this month could be better than in April. TCS, Infy and Sun Pharma stocks could see some respite from selling in the coming week. However, banks and reality sector, especially stocks like Syndicate Bank, Canara Bank and DLF, could see wild gyrations as we move closer to expiry.