Based on the F&O rollover data, traders should prepare for volatility spikes and a range-bound-to-bearish period in the near future, analysts said on Sunday.
Futures and option contracts set to expire in August have received less interest following a weak July expiry, during which FPI short positions increased to 137,660 contracts.
Nifty fell 3.31 per cent in last 30 days. Derivatives rollovers fell to 75.71 percent in July from June's 79.54 per cent, and the rollover costs also remained low, indicating that investors are using a 'wait and watch approach.'
Though Nifty's open interest (OI) rose to 1.64 crore shares in August from 1.62 crore in July, the price movement were conservative, indicating no major build-up in long or short positions, analysts said.
The lack of a robust increase on either side suggested a cautious approach from investors.
According to analysts, the Nifty index formed a bearish candle on the daily and weekly timeframes and has been making lower lows for the past four weeks. The index fell below its 50-day EMA daily, indicating weakness. If it remains below 24600 zones, weakness could be seen towards 24,442 and 24,250 zones, with hurdles shifting lower to 24800 and 24950 zones.
The VIX fell from 12.59 to 11.54 at the end of July and remained range-bound for the majority of the month, despite trade tensions and concerns about a global economic slowdown.
Last week, US President Donald Trump set a 10-12 day deadline for Russia to end the war in Ukraine. If this deadline is not met, there may be further sanctions and secondary tariffs imposed on nations that engage in trade with Russia, which could lead to an increase in oil prices.
India is a large buyer of Russian oil, and if the US imposes sanctions on India, exports may be affected, leading to a decrease in dollar inflow into India, which could influence the rupee. However, the price of crude oil currently remains low, though analysts have warned of a surge in crude prices ahead.
(With inputs from IANS)
