June 01,2020 Trade Plan- Index may try to go higher, NIFTY Futures at discount.

Index futures and stock futures across the board are trading at a discount to spot prices. Nifty futures are trading 100 points below spot, which is not usual. Another unusual aspect is that the highest Call open interest continued to steadfastly remain at strike price 9,500 even though Nifty has moved past this level and closed above it. In a logical adjustment, either there will be a sharp shift in strike price, or Nifty should see some retracement in the form of consolidation.

Volatility remained nearly unchanged as the volatility gauge India VIX rose marginally by 0.67% to 30.2200.

On Monday, Nifty is likely to see a stable start to the week. The 9,625 and 9,680 levels will act as key resistance, while supports will come in at 9,500 and 9,460 levels. Nifty’s price action against the 9,500 level will be crucial going forward regardless of how it moves on Monday.

All in all, there are fair chances that we may see some extension of the current move. However, it should be kept in mind that Nifty has risen over 470 points in just three sessions. This makes chasing the rally dangerous form a very short-term perspective. The short-term indicators are not oversold anymore. It will be not surprising if we see some halt to the up-move or the market consolidates in a broad range. While some profit-taking is expected at higher levels, we recommend chasing the up-move with an overly cautious and stock-specific approach.

Nifty Bank (19297) Now 19536-21110 is possible as long as 18500 holds’ The Nifty Bank unfolded strong and has closed in the green…technically upside to our target of 19536-21110 still stands valid as long as 18962 holds…
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