NIFTY & BANK NIFTY VIEW FOR 01/07/2016

AS EXPECTED NIFTY & BANK NIFTY RESPECTED OUR VIEW FOR UPSIDE FOR 100 & 300 POINTS RESPECTIVELY.

INFACT JUNE NIFTY FUTURE MADE HIGH OF 8310 DOT TO DOT OF OUR RESISTANCE LEVEL.

NOW LETS TRY TO MOVE FORWARD TO OPTION CHAIN ANALYSIS.

Nifty

July Series

More than 3150k shares were added in 8000-8100-8200 PE (not considered xx50 strike prices). On CE front 1450k shares were added in 8300-8400-8500 CE. We can see that less additions took place on CE front that may be due to less premium and sudden upside move in last 2 trading sessions and nearby highest CE OI at 8500. 

Highest OI tag is with 8000 PE & 8500 CE.

Bank Nifty 
7th July 2016 Option chain (Weekly Expiry)
Highest OI is at 18000 CE and after to that next round off strike prices (multiple of 500) comes at 18500 CE but OI at that strike price is much lower and we do not expect that 18500 CE may cross 18000 CE on OI front before this contract expiry. But still if we consider additions in 18000 to 18500 CE about 280k shares were added in OI but then on PE front from 17500-18000 more than 400k shares were added in OI which reflected more strength on Bear Camp. 

Highest OI tag is with 17500 PE & 18000 CE 

July Series
Almost same quantum of additions can be seen in 17500-18000 PE during last trading session with almost similar action in  18000-18500 CE front. Here also like Nifty, CE are comparatively undervalued that PE. 

Highest OI tag is with 17000 PE & 18000 CE. Bank Nifty Future (July Contract) closed near to highest OI. 

NOW LETS SEE SOME IMPORTANT NIFTY RATIO

PE RATIO FOR NIFTY STANDS AT 22.75
(52 week high is 23.80)
PE RATIO FOR BANK NIFTY STANDS AT 25.80
(at life high)

JULY SERIES
NIFTY PCR ON BASIS OF OI IS 0.96
BANK NIFTY PCR ON BASIS OF OI IS 1.09

FINAL CONCLUSION

Nifty & Bank Nifty
If we consider PCR for Nifty & Bank Nifty we are not in over bought zone. Infact Nifty suggest neutral with Bank Nifty slightly above neutral. Now as Bank Nifty Future closed near to highest OI we can expect some weakness in it which may lead some softness in Nifty too. Further to add as per our way of studying Nifty/Bank Nifty on hourly chart both are over bought. 7th July weekly option contract may help Bears to bring both Indices down. Also we had shared Bank Nifty chart during last trading session wherein we expect some resistance.

If we talk about premium in Nifty July series option then CE are still undervalued than PE. 

Further too added we have not entered in Bank Nifty as we feel at start of series it will be too much risky to enter monthly contract and further trading on buy side in weekly contract result in too much fast premium eroding.

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STANDARD DISLCOSURE:-

PLEASE NOTE THESE MOVES ARE AS PER CHARTS AND OPTIONS CHAIN WHICH MAY REVERSE ANYTIME. THIS POST IS FOR EDUCATION PURPOSE ONLY AND NOT TO BE CONSIDERED AS BUYING OR SELLING RECOMMENDATION. WE ARE NOT SEBI REGISTERED RESEARCH ANALYST. WE ARE NOT RESPONSIBLE FOR ANY PROFIT OR LOSS FOR ANY TRADES EXECUTED ON BASIS OF THIS POST. WHILE UTMOST CARE HAS BEEN TAKEN WHILE ANALYSING CHARTS & OPTIONS DATA BUT IF INCASE THERE IS ANY HUMAN ERROR WE ARE APOLOGISE FOR IT.

WE REQUEST ALL READERS TO GIVE THEIR FEEDBACK ON NIFTY50STRIKER@GMAIL.COM OR BY CALLING ON 08866145155 OR BY COMMENTING ON THIS BLOG POST.

ABOUT AUTHOR ~ MANUSH VADHER

WORKING AS SHAREKHAN SUB BROKER AND HOLDING MASTER DEGREE IN FINANCE HAVING EXPERIENCE OVER 10 YEARS IN CAPITAL MARKET. 

NIFTY & BANK NIFTY VIEW FOR 04/03/2016