Deploy modified call butterfly strategy in Nifty
The upcoming week can be approached with a low-risk strategy like modified Call Butterfly in Nifty.
Research by Quantsapp Advisory, SEBI-registered research analyst (Reg. No. INH000006332)
Nifty monthly rollover stands 57.39% in April to May series expiry while Bank Nifty rollover stands at 79.03% in April to May series expiry.
Nifty future closed the week, around 18,112, gaining about 2.58 percent. During the week, Nifty gyrated between 18,128 - 17,633. On the OI (open interest) front, short covering built-up was witnessed in Nifty Futures over the week gone by as there was a decrease in OI, with gains witnessed in Nifty weekly closing basis.
On the other hand, Bank Nifty May Futures gained about 2.27 percent as it closed the week around 43,230. Its future gyrated between 43,273 to 42,369 and ended the week with good gains.
Further diving into the Nifty upcoming weekly expiry, Nifty immediate resistance stands at 18,200 levels where nearly 61.98 lakh shares is the open interest of CE options followed by vital resistance at 18,300 levels where about 61.20 lakh shares of CE options is the open interest. On the lower side, immediate support level is at 18,000 where nearly 93.60 lakh shares is the PE options open interest followed by 17,800 where nearly 80.59 lakh shares is the PE options open interest.
Looking at the Bank Nifty upcoming weekly expiry data, on the upside, Bank Nifty immediate and vital resistance is at 43,500 where nearly 18.86 lakh shares is the CE open interest, whereas, on the lower side immediate and vital support is at 43,000, about 42.86 lakh shares, which is the PE open interest.
India VIX, fear gauge, decreased to 10.95 over a week-to-week basis from 11.63. Further, any uptick in India VIX could accentuate the downward move in Nifty and vice versa.
Looking at the sentimental indicator, Nifty OI PCR for the week has increased to 1.327 from 0.93. Overall data indicates PE writers are more aggressive than CE writers in Nifty.
Moving further to the weekly contribution of sectors to Nifty; all sectors contributed positively. Oil & Gas and Private Bank contributed positively by +64.63 and +61.34 points, respectively. Auto also contributed positively to Nifty by +20.63 points. IT and PSU Bank contributed positively to Nifty by about +59.63 and +28.35 points, respectively. NBFC and Cement contributed positively to Nifty by +43.55 and +12.10 points respectively. Capital Goods contributed positively to Nifty by +42.08 points.
Nifty monthly rollover stands 57.39 percent in April to May series expiry while Bank Nifty rollover stands at 79.03 percent in April to May series expiry. Havells India has the highest stock wise rollover of 96.45 percent followed by SBI Cards and JK Cement with rollover standing at 95.99 percent and 95.02 percent respectively, while HDFC has the lowest rollover of 46.01 percent followed by ONGC and Tata Steel with rollover standing at 55.43 percent and 62.22 percent, respectively.
Looking towards the top gainer & loser stocks of the week in the F&O segment. L&T Technology Services topped by gaining over 12.60 percent, followed by GNFC 12.50 percent, Indus Tower 11%. Whereas IPCA Lab lost -15.20 percent, Crompton Greaves Consumer Electrical has lost over -13.30 percent, Godrej Consumer Products lost -7.8 percent over the week.
The upcoming week can be approached with a low-risk strategy like modified Call Butterfly in Nifty.
This trade idea was published on 2 May 2023 by Shubham Agarwal for Quantsapp Advisory, a SEBI-registered research analyst (Reg. No. INH000006332) and an independent proprietorship, not Quantsapp Private Limited. It reflects the market on that date and is not a current recommendation.
First published on 2 May 2023: prices, lot sizes and expiries are those of that time. They are illustrations for education only, not investment advice. Derivatives trading carries risk; read all scheme and risk documents before trading.