FIIs index futures data signifies they are overbought in Indian market and any unwinding of longs or fresh shorting may lead to a correction in the market, Motilal Oswal has said while analyzing F&O Data.
According to the broking firm, it was a historic month for the market as Nifty posted highest ever series on series gains (in absolute term).
"Bulls were aggressive from the start of the November series and kept the ball in their court throughout the series. Index marched above 13000 mark for the first time in history and managed to conclude the November expiry a tad below the same. It gained by 1316 points or 11.28% over its October series close. Nifty started the November series with some long positions and Bulls didn't miss any chance to enjoy the festive session. Traders cherished the outcome of US elections and Diwali festival as Indian markets reached to the record highs along with rally in global markets. Buying interest was seen across the board as all the sectoral indices ended the series in green," Motilal Oswal said in its report.
"Among them, Banking, Financials and Metal indices were major gainers. We witnessed good amount of long build-up in the recent rally of Nifty and most of these positions got rolled to next series as Rollover stood at 78.68%, which is higher than its quarterly average of 76%. Open interest also increased by 14.24% on series-on-series basis. The overall data indicates that the longs are still in the system and some more steam left on the upside," the broking firm has said.
According to the Motilal Oswal report, India's VIX fell by 16.65% to 20 levels in November series. Volatility has to further cool down to continue the momentum with higher market base.
"FIIs have made highest monthly buying in November. Except marginal selling on first trading session of November expiry, they were significant buyers on all other sessions. They have pumped in approximately Rs 56733 crore in November series. FIIs also continued their buying streak in index futures for major part of the series and as a result, their 'Long Short Ratio' has increased from 44.54% to 76.63% on series-on-series basis. This has helped the index to cross the 13000 mark. On the other hand, DIIs have been selling non-stop and cumulatively sold equities to the tune of Rs 42719 crores in November series," Motilal Oswal has said in its report.