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August series to keep the index afloat with strong supports

Nifty index kick started the July series on a positive note above 19000 marks and bulls continued its strength from the previous three series to touch a new life time high of 19991 zones. Any minor declines were converted into buying opportunity and bulls were seen active throughout the series. It took a fortnight the fastest 1000 point rally in the index. Nifty formed a Bullish candle and has been making higher highs - higher lows from the last four series with addition in open interest by 33.84% in the series with a rise in price by 3.63% on an expiry-to-expiry basis. Rollover of Nifty stood at 84%, which is higher than its quarterly average of 77%. Continuous longs have been added at support zones which has acted as a good base which may keep the market afloat.

Since it's the beginning of the new series, Option data is scattered at various far strikes in monthly series. On weekly front, Maximum Call OI is at 19800 then 19700 strike while Maximum Put OI is at 19600 then 19500 strike. Call writing is seen at 19700 then 19600 strike while Put writing is seen at 19600 then 19500 strike. Option data suggests a broader trading range in between 19300 to 20200 zones while an immediate trading range in between 19500 to 19850 zones.

Nifty closed near 19650 zones and At The Money Straddle (August Monthly 19650 Call and 19650 Put) is trading at net premium of around 485 Points, giving a broader range of 19165 to 20135 levels. Considering overall derivatives activity, we are expecting positive to range bound move for Nifty as we head in the August series. Now it has to hold above 19500 zones to witness an up move towards 19991 and 20200 zones while on the downside major support shifts at 19300 zones

We have witnessed buying interest in Media, Energy, Pharma, Realty, PSU Banks, Auto and Metal sector while some profit booking was seen in FMCG and IT sector.

India VIX decreased by 3.5% from 10.89 to 10.51 levels in the July series. Volatility sunk below 10 and has been relatively low from the last five series comforting the bulls at record high zones

FIIs continued their buying streak and cumulatively bought equities worth Rs 16234 crores so far in this month. DIIs had an offsetting position and sold to the tune of Rs 5186 crores in July till date. The FIIs 'Long Short Ratio' in index futures remained improved and ranged from 53.67% to 73% in the July series to close at its lower band. The ratio improved from 7.8% to 73% in a span of 100 days and the index soaring at life high levels.

Bank Nifty was in line with the broader market and drove above 46350 marks in the July series. Follow up buying was seen which kept the index and it touched all time high of 46369 zones. Short covering was seen as open interest decreased by 14.5% and price was up by 3.1% on an expiry-to-expiry basis. Rollover in Bank Nifty stood at 77.4%, which is lower than its quarterly average of 78.3% but overall buying interest is going to keep the positive trigger intact. Bank Nifty needs to hold 44444 zones to extend this move towards its recent lifetime high of 46369-46500 zones.

On stocks front, we witnessed long rollovers in BHEL, Escorts, Coromandel, Auropharma, ZEEL, ACC, GAIL, Rec Ltd, Hindcopper, BSoft, Tatamotors, Cumminsind, NMDC, Ambujacem, Mcdowell and Ashokley while short rollover in UPL, Bandhan Bank, PIIND, Dixon, Eicher Motor, SRF, IEX and M&MFin.

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