By Gaurav Arora
The July series Nifty futures is currently trading with a premium of around 40 points. After a vertical rise, the index has been trading sideways for the past few sessions.
No major OI change seen since the start of the series. To put it in numbers, the Open Interest stands at 6.33 lakh contracts as compared to 6.4 odd at the beginning of the series.
Bank Nifty underperformed, the ratio which was at 2.2 at the start of the series is now at around 2.15. Going forward, it may just be at par w.r.t the benchmark.
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For the Index futures, FII Net Index Long exposure is above 84%. Statistics suggest markets tend to consolidate and witness some profit taking at such huge levels. However, the texture would remain Positive i.e. Buying the Dips would continue to reward.
Going forward, we believe 23,800-900 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.
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For Nifty, the VWAP (Volume weighted average price) is around 23,800-850 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 2.15, this ratio has a support at 2.14 and resistance near 2.21.
We expect Bank Nifty to trade at par with the benchmark. 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 & FMCG look good in Nifty.
Nifty CALENDAR SPREAD:-
BUY Nifty 18 JUL 24,300 PE @ 123
SELL Nifty 11 JUL 24,300 PE @ 65
Spread @ 58 Target – 100 Stop @ 25