The RBI cut benchmark rates by 25 basis points (bps) on 4 October, bringing down the repo rate from 6.5% to 6.25% since then there is a significant underperformance in banknifty futures as compared with nifty futures. And this underperformance in banknifty futures is expected to continue in the upcoming trading sessions as every minor rallies in banknifty gets rejected at higher level and sellers stepping in.
Nifty Futures is currently trading near the crucial support zone 8720 zone which is a go or no go zone. As long as price trades above 8700 zone one can anticipate price oscillation around 8700-9000 range. One has to be cautious if any day price tends to trade and close beloww 8720 levels.
Too many consolidation zones in both nifty and banknifty futures indicates that we are dealing with a aged trend. Which means long trades has to be handles with reduced position size compared to the short trades and one should mentally prepare for any quick reversal trades. One should not forgot that we are in a emotional buyers market which is not a good sign for a long term trend evolution.
Nifty Open Interest Lookup
Nifty Open Interest Range for this series is 8500-9000 range. Call writers are active at 9000CE and put writers are active at 8500PE and 8600PE levels. And the current downtrend in nifty and banknifty is more of liquidation in index futures positions from the participants and no fresh addition of shorts visible in this series. India VIX is back to square one after the surgical strike attack. Currently we are facing a low volatile markets and fear started to reduce but with improved volatility compared to previous month.