The month of May 2014 witnessed a strong buying support and Sensex and Nifty jumped 8.03% and 7.97% respectively. Markets are consolidating their gains at the top after hitting all time high. In the near term we expect that market direction to remain positive and steady after decisive strong mandate in favour of the BJP. The next major trigger for the market is the Union Budget for 2014-15. Finance Minister Arun Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha by mid-July 2014.
Technical Outlook for CNX Nifty
After consolidating between 6650-6900 in April month, Nifty scaled almost vertically and formed a new all-time high at 7563.50 in May. The upside breakout was triggered by the general election results which paved the way for stable government to come in and push the growth reforms. We have been seeing sustainable buying since then with noticeable volume in cash segment. We believe that positive bias is here to stay; however, one should be focused on stock specific trading considering the substantial run in benchmarks.
The May expiry was very spectacular with gains of 5.8% during the month despite a correction in the last week of expiry. Total rollover of 80% (6m-avg 78%) and Nifty rollover was at 59% (6m-avg 63%). The June futures is being trading flat with a premium of 3 points as lot of nifty companies are going ex-dividends during the month.
The sectors witnessing strong roll overs are Automobiles, Infrastructure, Oil-Gas and Metals sectors while weak rollovers were in FMCG, Technology and Telecom sectors. Among the individual stock with high roll overs were JSW Steel, Hind Zinc, HPCL and GMR Infra while stocks like Mcdowell, Axis Bank, Kotak Bank and SBI had weak rollovers.