By Manojh Vayalar
The September series Nifty futures started with a premium of around 150 points for the current month. For the Nifty futures, FII maintained around 50% short positions, higher than the last month’s series, which is now currently around 40% shorts. The index has added marginal longs since the start of this series. We believe that till the time Nifty doesn’t close below 19,800 levels, dips could be an opportunity to enter into longs and hence Buy on Dips is the trade sentiment in Nifty.
The VIX for the Nifty has been more or less at around 11.5% implying lower nervousness wrt last series.
FIIs started this series with Longs position in Index of around 50%, which are currently around 40% shorts as of yesterday. For the Nifty, the IVs for the options stayed at around 10 levels in yesterday’s trade implying complacency in the trend. For the Bank Nifty 28th September, 46,000 strike call option has highest open interest implying resistance around 46,200-46,300. Bank Nifty has strong support near 44,000 levels. For the Nifty, the VWAP (Volume weighted average price) of Nifty September Futures is around 19,800 implying that to be the support. Above this, Nifty is to be positively biased for the short term towards 20400.
With FIIs having higher long positions in the Index, currently higher than the last month, we expect Nifty could continue finding support at the lower levels.
The ratio between Bank Nifty and Nifty is currently at 2.27, this ratio has a support at 2.20 and resistance near 2.36. We expect the Nifty to outperform as it finds support at lower levels.
Sector-wise, Cement, Pharma and IT look positive in Nifty.
Nifty Call Spread:
Buy 28th September 20000 CE@ 65;
Sell 28th September 20100 CE@ 33;
Net Premium @ 32, SLOSS @15;
Target @60.
(Manojh Vayalar, VP- Derivatives, Religare Broking Ltd. Views expressed are the author’s own. Please consult your financial advisor before investing.)
