By Gaurav Arora
The Jun series Nifty futures is currently trading with a premium of around 20 points.
After previous week’s roller coaster rides where the index tested almost 21,250 and still managed to close around record highs, it’s now trying to find some stability around current levels.
Some OI got reduced in its futures as the event unfolds. On the other hand, there was hardly any change in OI in Bank Nifty Futures.
For the Index futures, FII Net Index Long exposure is at 34% which has risen considerably after making lows at 13%. We believe more to come in the coming sessions.
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 16, which has declined substantially after the event. However, we believe, it may be in the range of 15-21 for the time being.
For the Nifty, the IVs for the options were around 17 levels in yesterday’s trade.
For the Nifty, the VWAP (Volume weighted average price) is around 22,700-750 implying that to be the key level. That should be watched as a Fresh Long formation Zone.
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 20 Jun 23,250 PE @230
SELL Nifty 20 Jun 23,250 CE @ 255
Spread @485, Target 300, SL : 550.
(Gaurav Arora is a Derivatives Analyst at Religare Broking. Views expressed are the author’s own. Please consult your financial advisor before investing.)