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January Series Outlook

Nifty futures has rolled around 64% vs 81% with respect to the last month, the open interest for the new contract is lower, due to lower participation into January series. Nifty futures are positively biased till we are trading above VWAP (Volume weighted average price) of 17400 for the January series. We expect nifty to be in 17400-18100 range for the major part of January series. FIIs have sold around Rs 35000 Cr in the cash market in December.

We believe the Nifty might be negatively biased here on if it closes below 17400. FIIs had started the Reverse arbitrage mode, i.e selling in cash market and buying stock futures to bring down the equity exposure, however last two day shave witnessed some cash based buying. Dollar index above 96.75 seems to be the pivot for this. We expect Nifty to bounce to around 18000 levels with in the first 10 days of January month.

Banknifty futures rolled at around 85% vs 82% compared to the last month. The open interest of Banknifty futures in this series is higher by around 0.5 lkh due to fresh long positions during expiry week. Banknifty has to outperform the Nifty this series for the bullishness to continue.

Banknifty futures have been underperforming Nifty in the last two month, we believe it might outperform overall with respect to Nifty in the December series. For this series, ratio wise 2.17 is resistance and 2.02 the support. The ratio between Banknifty and Nifty currently at around 2.07 However the major support for Banknifty would be around 35600 levels. We expect Banknifty to be in 35600-38000 levels in the major part of January series.

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