By Manojh Vayalar
The February series Nifty futures started with a premium of around 150 points. The Nifty rolled around 81% and Bank Nifty around 77%. For the Index futures, FII have reduced their long positions to 22% from 70% since the start of the January series.
The Index is now likely to continue trading with a positive bias keeping 21500 as the pivot for the series. 21100-21200 might be the immediate support and holding above it might bring in a further move towards 22300 levels.
VIX for the Nifty is currently at 16 and likely to remain in the 14 to 18 range implying a range of around 850 points. FIIs started this series with Long position in Index futures of around 22% vs 70% last month, which are currently at around 25% longs.
For the Nifty, the IVs for the options remained around 17 levels in yesterday’s trade. For the Bank Nifty 29th February, 47000 followed by 46000 strike Call option have huge open interest implying resistance at around 47000-47200.
For the Nifty, the VWAP (Volume weighted average price) of February Futures is around 21500 implying that to be the support. Above this, Nifty is to be positively biased for the short term towards 22300.
With FIIs gradually reducing their short positions, we expect Nifty could continue with its positive bias above the 21500 levels towards 22300. The ratio between Bank Nifty and Nifty is currently at 2.10, this ratio has a support at 2.04 and resistance near 2.16.
Sector-wise, Banks and Realty look good in Nifty.
Nifty Bull Call Spread:-
Buy Nifty 29 FEB 21700 CE @ 430
Sell Nifty 29 FEB 22000 CE @ 210
Spread @210, SL @ 170, Target 330.
(Manojh Vayalar, VP- Derivatives, Religare Broking Ltd. Views expressed are the author’s own. Please consult your financial advisor before investing.)