By admin Nifty August futures contracts are trading with a premium of around 50 points whereas September futures is currently at a premium of 180 points.
After some profit-taking, the index has resumed its upward journey, with the Open Interest (OI) in benchmark index futures showing an uptick. To put it in numbers, the OI stands at about 6.33 lakh contracts compared to around 5.5 lakh at the start of the series.
After a period of underperformance, Bank Nifty is beginning to show some signs of stabilization. The ratio (Bank Nifty/Nifty) which was at 2.2 at the start of the previous series is now at 2.06. Going forward, the expectations are that this underperformance will halt. The sector had lagged but is now poised to capitalize on the other sectors’ momentum. This shift is underpinned by the rising FII Net Index Long exposure and optimism in the financial sector.
The Foreign Institutional Investors (FII) Net Index Long exposure has risen to approximately 66%, up from 57% at the beginning of the new series. Apart from that, they bought worth Rs 25,000 crore in the cash segment in July month. This indicates a growing confidence among institutional investors in the market’s upward trajectory.
Support and Resistance Levels
The critical support level for Nifty is at around 24,500-24,600. A decisive close below this range could indicate a potential downside. The Volatility Index (VIX) for Nifty is currently around 13, with an expected range of 11-16 moving forward. This suggests a relatively stable volatility environment for the near term. This stability is crucial for executing strategies like short straddles/strangles, which rely on the market remaining within a specific range.
The Volume Weighted Average Price (VWAP) for Nifty is around 24,450-24,550, marking this range as a key level to watch. For Bank Nifty, the VWAP is around 50,700-50,800.
Other indications are also in favour of Bank Nifty ceasing its underperformance and could start performing well.