By Gaurav Arora
The May series Nifty futures is currently trading with a premium of around 65 points. After making record highs, the index has broadly been consolidating in a range i.e. almost at around the same levels where it started the May series but added substantial OI to the tune of 24% during this phase.
For the Index futures, FII Net Index Long exposure is at 28% which is lowest in the last 3 months or so. However, data suggests a potential Short Covering might be there in the sessions to come.
Going forward, we believe 22,150-200 might be the major support and only a decisive close below it might bring in some downside.
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VIX for the Nifty is currently at around 22, which has risen significantly from around 10 a few days back implying a larger swing in this month.
Considering the Lok Sabha elections, this is normal and this might continue at least till the event completely unfolds. We expect VIX to remain in the range of 18-26 for the next few sessions.
For the Nifty, the IVs for the options were around 16 levels in yesterday’s trade.
For the Nifty, the VWAP (Volume weighted average price) is around 22,425-450 implying that to be the support. Holding above that, Nifty is to be positively biased for the short term towards 22,900-23,000.
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The ratio between Bank Nifty and Nifty is currently at 2.14, 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.
Banking respected its major support at 47,000 and is consolidating around 48,000 mark. A decisive close above 48,350 might trigger the next significant move in the banking index.
Sector-wise, IT and Banking look good in Nifty.
Nifty Ratio Spread:-
BUY Nifty 30 May 22,600 CE @155
SELL Nifty 30 May 2* 23,000 CE @ 40
Spread @75, Target 130
