By Gaurav Arora
The June series Nifty futures is currently trading with a premium of around 25 points.
After the election outcome week’s roller coaster rides where the index tested almost 21,250 and still managing to close around record highs, it’s now gradually inching higher, however the daily candles are not very decisive.
On the other hand, there was hardly any change in OI in Bank Nifty futures.
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For the Index futures, FII Net Index Long exposure is at 47% which has risen considerably after making lows at 13%. We believe some fuel is still left.
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Going forward, we believe 22,700-22,800 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 13, which has declined substantially after the event however we believe it may be in the range of 11-17 for the time being.
For the Nifty, the IVs for the options were around 15 levels in yesterday’s trade.
For the Nifty, the VWAP (Volume weighted average price) is around 22,750-800 implying that to be the key level. That should be watched as a Fresh Long formation Zone.
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For Bank Nifty that comes out to be at 48,900-49,100.
The ratio between Bank Nifty and Nifty is currently at 2.13, this ratio has a support at 2.12 and resistance near 2.20. We expect Bank Nifty to trade in tandem w.r.t Nifty going forward.
Any decline towards 48,900-49,100 should be looked at as a Fresh Buying opportunity in the Banking index with 48,400 as a Stop.
Sector-wise, IT & Pharma look good in Nifty.
Nifty Short Straddle:-
SELL Nifty 27 Jun 23,500 PE @140
SELL Nifty 27 Jun 23,500 CE @ 207
Spread @347, Target 200, SL : 400
(Gaurav Arora , Derivatives Analyst, Religare Broking. Views expressed are the author’s own. Please consult your financial advisor before investing.)
