Deploy modified long call butterfly strategy in Nifty
Considering upside momentum, 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)
Shubham Agarwal
Nifty consolidation continues as it shuts shop with marginal gain of 0.27% around 15,754. The Nifty future during last week ranged from 15,950 to 15,500. On the OI (open interest) front, short covering was witnessed in Nifty over the week gone by as there is marginal drop in OI.
Following Nifty, Bank Nifty also closed with a marginal loss of 0.05% at around 33600. Bank Nifty future gyrated between 34200 and 33100 and ended the week with a loss of around 15 points. It also witnessed long unwinding on OI front.
Further diving into the Nifty upcoming weekly expiry, PE option writers showing aggression. Nifty immediate resistance stands at 15800 and vital resistance stands at 16500 levels where nearly 40L and 46L shares have been added respectively. On the lower side, immediate and vital support level is at 15500 where nearly 41L shares have been added.
Looking at the Bank Nifty upcoming weekly expiry data: On the upside, Bank Nifty immediate and vital resistance at 34000 where nearly 15L shares have been added whereas; on the lower side, immediate and vital support stand at 33000 where nearly 20L shares have been added.
India VIX trading around 21.25. It has increased marginally by 3% from 20.55 to 21.25 over the week. Further, any upside in India VIX can push downward momentum in Nifty.
Looking at the sentimental indicator, Nifty OI PCR for the week has increased to 1.143 from 1.04. Bank Nifty OIPCR over the week increased from 1.032 to 1.055 compared to last Friday. Overall data indicates PE writers are more aggressive than CE writers in Nifty.
Moving further to the weekly contribution of sectors to Nifty, most sectors have marginally contributed positively. IT, FMCG and PSUB have contributed the most on the positive side in the Nifty by 38.51, 32.39 and 13.26 points respectively, while only OIL contributed negatively to Nifty by 93.67 points.
Looking towards the top gainer & loser stocks of the week in the F&O segment: Granules topped by gaining over 8.5%, followed by Bosch 8.5%, ITC 7.1%. IEX lost over 8.2%, Indiamart Intermesh 7.7%, and Bandhan Bank 7.3% over the week.
Nifty rollover stands at 72% versus 77% (June expiry day) and Bank Nifty rollover stands at 86% versus 85% (June expiry day).
Considering the upside momentum, the upcoming week can be approached with a low-risk strategy like Modified Call Butterfly in Nifty.
Learn and read more about sgx nifty future from Quantsapp classroom which has been curated for understanding of Long Straddle from scratch, to enable option traders grasp the concepts practically and apply them in a data-driven trading approach.
This trade idea was published on 4 Jul 2022 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 4 Jul 2022: 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.
