The Nifty August expiry ended on a volatile note, despite a smooth uptrend during most part of the month. Now traders are setting their eyes on the 1 September 2022 expiry of the . Here are a few key data points that might help you to sail through the next week
First of all the global setup is looking somewhat neutral to the positive side. The ended yesterday’s session on a bullish note, closing 0.98% up at 33,291.78 which is around the highest level for the day. The and also closed up by 1.41% and 1.61%, respectively. However, today the US markets are seeing a bit of selling pressure and the overnight Dow and are trading with a slight cut.
However, the majority of the action will happen on Monday as the market would react to the Jackson Hole Symposium, which will conclude on 27 August 2022. The statements of the US Fed chairman Jerome Powell as he addresses the issues of 4-decade high inflation, stance on increasing interest rates, the potential of a dent to growth, etc. would dictate the broader direction of the market for the next week.
The Indian rupee against the US dollar seems stable as of now as it has been for the last few sessions. prices are also maintaining their strength at around US$100 per barrel which has also been discounted by our markets. So, no issue on the global front seems to be a big concern for our markets.
Coming to our local cues, luckily, there hasn’t been any severe selling pressure seen from FIIs. For the last three sessions, FIIs have been net buyers in the cash market, including INR 396 crores of buying in the cash market on 25 August 2022. Although DIIs remained net sellers for the last few sessions, the selling is not much concerning. For instance, DIIs have only sold INR 334.3 crores, INR 322.3 crores, and INR 215.2 crores in the last 3 days which was easily absorbed by the FIIs. However, FIIs have remained net sellers on index futures in the last few days. Today’s data is yet to come out.
Interestingly, the Nifty September futures contract has closed at a very high premium of around 120 points. The Nifty spot closed at 17,558.9, while the current month futures closed at 17,678. Although the premium is generally high at the beginning of a new contract, 120 points is very high and is indicating traders are quite bullish on the direction of the Nifty in the next week. This very high premium on the futures contract would work in the favor of call option sellers this month as by the expiry the premium on the contract completely erodes and the futures price comes at parity with the spot price.
Coming to the chart, the Nifty’s range for the next week seems to be 17,720 – 17,730 (spot) on the upside, while there is decent support around 17,450. However, as there is quite a high premium on the futures, a break above the resistance might be more likely.
