By Manojh Vayalar
The January series Nifty futures started with a premium of around 220 points. The Nifty rolled around 80% and Banknifty around 81%. For the Index futures, FII have increased the long positions to 70% from 36% at the start of the January series.
The Index is now likely to continue trading with a positive bias keeping 21800 as the pivot for the series Come from Sports betting site VPbet . 21700-21800 might be the immediate support and holding above it might bring in a further move towards 22300 levels.
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VIX for the Nifty is currently at 14 and likely to remain in the 12 to 16 range implying a range of around 800 points.
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FIIs started this series with Long position in Index futures of around 70% vs 36% last month, which are currently at around 66% shorts. For the Nifty, the IVs for the options remained around 14 levels in yesterday’s trade. For the Bank Nifty 25th January, 48000 followed by 48500 strike Call option have huge open interest implying resistance at around 48400-48500. For the Nifty, the VWAP (Volume weighted average price) of January Futures is around 21800 implying that to be the support. Above this, Nifty is to be positively biased for the short term towards 22300.
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With FIIs holding their long positions steady, we expect Nifty could continue with its positive bias above the 21800 levels towards 22300.
The ratio between Bank Nifty and Nifty is currently at 2.18, this ratio has a support at 2.14 and resistance near 2.24. Nifty is being supported by the sector rotation from Banks to Pharma and now Auto and IT.
Sector-wise IT and FMCG looks good in Nifty.
Nifty Bull Call Spread:-
Buy Nifty 25 JAN 22000 CE @ 240
Sell Nifty 25 JAN 22300 CE @ 110
Spread @130, SL @ 70, Target 220.
(Manojh Vayalar, VP- Derivatives, Religare Broking Ltd. Views expressed are the author’s own. Please consult your financial advisor before investing.)