Benchmark indices have recovered and are trading marginally higher amid volatility ahead of October derivatives expiry today.
Traders will roll over positions in the futures & options (F&O) segment from the near month to November series.
The data for two important indicators -- fiscal deficit and core sector -- for the month of September are likely to be released today.
At 12:50 PM the Sensex was up 49 points at 21,083 and the Nifty was up 12 points at 6,264.
On October series F&O contracts expiry day, Chetan Jain of Anand Rathi Fin is advising his clients to go with long strangle strategy for Nov. Series by buying 6200 call & 6100 put to play either side volatile movement.
Speaking with Manu Kaushik, Chetan Jain said he is bullish on LICHSGFIN, IDFC, REC, JPAssociate and outlines his strategy for playing October series expiry.
SmartInvestor:Markets have seen a rally with Nifty trading above the 6200 mark now. How do you see the expiry panning out?
Chetan Jain:Looking at derivative data a strong writing at 6300 calls suggesting that these levels will work as major hurdle for rest of the day whereas on downside 6250 fresh put writing is suggesting that range for settlement of the Oct series is 6250-6300 levels.
SmartInvestor:Indices have surged to 3-year highs yesterday but turned choppy today on account of October series F&O expiry. Is the momentum likely to continue and what is your call on Nifty futures for Nov expiry?
Chetan Jain:6280-6350 is very crucial hurdle zone for the markets and it is make or break phase for the markets if it is able to hold the current juncture then fresh breakout towards life high territory may give move of 5-7% very fast however if fails to hold the current levels then sell off towards 6000 may be seen.
Chetan Jain:Traders can go with long strangle strategy for Nov. Series by buying 6200 call & 6100 put to play either side volatile movement
SmartInvestor:Which sectors do you see strong roll-over of positions in?
Chetan Jain:Finance, FMCG, Metal and Automobile sectors are seeing better rollovers.
SmartInvestor:Are there any long positions that one can take on the Bank Nifty?
Chetan Jain:Bank Nifty after a major breakout above 11000 levels yesterday witnessed some profit booking yesterday, however till the time it is holding this levels any dip can be seen as buying opportunity with major support at 11000 psychological levels. On higher rally is likely to continue followed by short covering move towards 11650-11800 levels.
SmartInvestor:India VIX fell to 18 levels. How much more of a downside can be seen from hereon?
Chetan Jain:INDIAVIX was moving in an inversely proportional manner with markets, as markets were making higher highs and it moved down from 28 till 18 levels. In last two months INDIAVIX had cooled off significantly from 36 till 18 levels suggesting participants are not expecting any major downside move from the current juncture.
SmartInvestor:What trading advice are you recommending to your clients?
