Deploy modified call butterfly strategy in Nifty this week

Bank of Baroda: Bank of Baroda Q1 profit jumps 79.4% YoY to standalone profit to Rs 2,168 crore, net interest income grows 12%. The public sector lender reported 79.4% year-on-year growth in standalone profit at Rs 2,168 crore for the quarter ended June 2022, despite fall in other income and pre-provision operating profit. The significant decline in bad loans provisions aided the bottom line. Net interest income grew by 12% YoY to Rs 8,838.4 crore in Q1FY23, with credit growth at 18 percent and 10.9 percent YoY increase in global deposits.

In the past week, Nifty surpassed the technical hurdles with momentum and gyrated between 17,222 and 16,438. On the Open Interest (OI) front, short covering was witnessed in Nifty over the week gone by as there was a decrease in OI.

On the other hand, Bank Nifty gained about 2.35% as it closed the week around 37,581. Bank Nifty futures gyrated between 37,800 and 36,250 the last week. Overall, Bank Nifty ended the week with gain of about 862 points and witnessed short covering on OI front.

Let’s dive into the Nifty’s upcoming weekly expiry. Nifty’s immediate resistance stands at 17,300 levels where nearly 41 lakh shares is the open interest followed by vital resistance at 17,500 levels where 44 lakh shares is the open interest. On the lower side, immediate support level is at 17,000 where nearly 60 lakh shares were added in the PE options open interest followed by 16,900 where nearly 47 lakh share were added.

##Bank Nifty’s upcoming Weekly expiry##

On the upside, Bank Nifty’s immediate and vital resistance is at 38,000 where nearly 19 lakh shares is the CE open interest, whereas, on the lower side, immediate and vital support is at 37,000 where 15 lakh shares is the PE open interest.

India VIX, fear gauge, decreased marginally to 16.51 from 16.65 over the week. Decrease in the IV has allayed fear in the market. Further, any downtick in India VIX can push the upward move in Nifty further.

Looking at the sentimental indicator, Nifty OI PCR for the week has decreased to 1.358 from 1.418. Bank Nifty OIPCR over the week decreased to 0.963 from 1.19 compared to last Friday. Overall data indicates PE writers are less aggressive than CE writers in Nifty.

Moving further to the weekly contribution of sectors to Nifty - IT, private banking names, NBFCs, FMCG stocks contributed on the positive side in the Nifty with 76.08, 154.36, 168.81, 58.76 points, respectively. Auto contributed about 3.93 points on the negative end.

Colgate Palmolive has the highest stock wise rollover of 96.15% followed by Naukri and Adani Ports with rollover standing at 95.07% and 94.78% respectively, while City Union Bank has the lowest rollover of 68.9% followed by Hindalco and NTPC with rollover standing at 58.74% and 59.13% respectively.

Looking towards the top gainer & loser stocks of the week in the F&O segment, Bajaj Finserv topped by gaining over 18.7%, followed by Navin Fluorine 16%, Bajaj Finance 15.5%, Whereas M&M Financial has lost over -11.1%, Shriram Transport Finance -8.3%, Intellect Design -8.2% over the week.

Considering the bullish mood, the upcoming week can be approached with a low-risk strategy like Modified Call Butterfly in Nifty

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