ahh… It depends on your strategy, if most of the trades you get are overnight I guess it is best to buy the August if not buy the July. The thing about rolling over is that sometimes the impact cost could be quite a bit, so for example in your case instead of just 1 trade with buying Aug, you would have executed 3 trades of buying/selling July and then again buying August. Other than the premium, you might end up losing another 10 to 20 bips just in bid/ask spread.
Confused with your question, can you explain it with an example?
Nithin, I am using continuous contract charts in futures for analysis. Say I have a buy setup at 100 in continuous contract charts which I get today(31.7.14 which is expiry day), so should I buy July contract at 100 and rollover end of the day, or should I buy August contract(which is trading at 101(rupee one premium))? Trouble with buying August contract is that it is trading at a premium, so automatically the entry/stop/target price will NOT be correct due to premium. So how do I go about when I get a setup on expiry?