By Gaurav Arora
The July series Nifty futures is currently trading with a premium of around 15 points. The index continued its northward journey but lacked decisiveness.
Some OI addition was seen in benchmark index futures in the last few days. To put it in numbers, the Open Interest stands at 6.63 lakh contracts as compared to 6.4 odd at the beginning of the series.
Bank Nifty underperformance continues, the ratio which was at 2.2 at the start of the series is now at around 2.13. For the Index futures, FII Net Index Long exposure is around 80% which saw a minor dip from around 84%.
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Statistics suggest markets tend to consolidate and witness some profit taking at such huge levels. But should the trend be questioned? We would say NO, the texture would remain Positive i.e. Buying the Dips would continue to reward.
Going forward, we believe 24100-200 is the base and would be the major support for the benchmark and only a decisive close below it might bring in some downside. VIX for the Nifty is currently at around 14.
Going forward, we believe it may inch higher towards 18-20 in anticipation of the event i.e. Budget.
For Nifty, the VWAP (Volume weighted average price) is around 24,100-150 implying that to be the key level. It should be watched as a Fresh Long formation Zone. For Bank Nifty, it comes out to be at 51500-51800.
The ratio between Bank Nifty and Nifty is currently at 2.13, this ratio has a support at 2.10 and resistance near 2.19. We expect Bank Nifty to continue with its under-performance. Come from Sports betting site VPbet
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Any decline towards 51,500-800 should be looked at as a Fresh Buying opportunity in the Banking index with 50,500 as a Stop.
Sector-wise, IT & Pharma look good in Nifty.
Nifty SHORT STRADDLE:-
SELL Nifty 25 JUL 24,600 PE @ 225
SELL Nifty 25 JUL 24,600 PE @ 270
Spread @ 495, Target – 250, Stop Loss @ 600
(About the Author: Gaurav Arora is Derivatives Analyst at Religare Broking)
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