By Gaurav Arora
The May series Nifty futures is currently trading with a premium of around 120 points.
For the Index futures, FII Net Index Long exposure is at 35% which is more or less at around the same levels for quite some time now.
The indices managed to find support around lower levels after a decent profit taking from record highs.
Going forward, we believe, 21700-800 might be the major support and only a decisive close below it might bring in some downside.
VIX for the Nifty is currently at around 10.5, considering the Elections and geopolitical tensions; this might not be sustaining at current levels for long and likely to inch towards the range of 12-15.
For the Nifty, the IVs for the options was around 12 levels in yesterday’s trade.
For the Nifty, the VWAP (Volume weighted average price) is around 22,200-250 implying that to be the support. Below this, Nifty is to be negatively biased for the short term towards 21,700-21,800.
The ratio between Bank Nifty and Nifty is currently at 2.14, this ratio has a support at 2.06 and resistance near 2.20. We expect Bank Nifty to continue its outperformance w.r.t Nifty going forward.
Sector-wise, IT and Banking look good in Nifty.
Nifty Calendar Spread:-
Sell Nifty 2 May 22,300 PE @122
Buy Nifty 16 May 22,300 PE @ 208
Spread @86, Stop Loss – 55, Target – 145
(Gaurav Arora is a Derivatives Analyst at Religare Broking. Views expressed are the author’s own. Please consult your financial advisor before investing.)