Nifty F&O rollover data hints at strong upward momentum; 2 stock ideas from Prabhudas Lilladher

Markets end the December series with a ray of hope for bulls, keeping the game interesting and going ahead.

Nifty rolls are at 74%, way lower than the previous month and also below the average of the past t 5 months. The weekly expiry option chain witnesses the highest PE writer position at 18000PE with over 45 lakhs OI shares, followed by 17300PE of nearly 30 lakhs OI shares. CE writers' exposures lie at 18200/18500 strike with nearly 30 lakh OI shares and 27 lakh OI shares each. Fresh put writing additions at 18200 strike witnessed, PCR OI at 18100 is 1.65, support for now, and no major call writing on above strikes indicates strong momentum upward.

Bank Nifty rolls also declined by 85%, compared to the previous month of 88%. The weekly option chain data reflects Put OI additions at 43000PE and 42500PE of over 17 lakh OI shares and 14 lakh OI shares. CE writers' most active position lies at 43500 strikes with over 12 lakh OI shares and over 8 lakh OI shares at above strikes of 44000/44500.

On a weekly basis, the whipsaw movement continued, with sector rotation play being the focus. However, PSU baskets continued to soar, with Metals likely to join the rally as well.

Stock Updates:
BUY REC: CMP 113, TGT 120/123, SL 110
SELL BEL : CMP 99, TGT 95/93, SL 101

(Shilpa Rout is Derivatives Lead Analyst at Prabhudas Lilladher)


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