Deploy modified Put butterfly strategy in Nifty
The upcoming week can be approached with a low-risk strategy like Modified Put Butterfly in Nifty.
Research by Quantsapp Advisory, SEBI-registered research analyst (Reg. No. INH000006332)
During the week Nifty gyrated between 18493 and 18256. On the OI (Open Interest) front, long unwinding built-up was witnessed in Nifty over the week gone by as there was a decrease in OI.
On the other hand, Bank Nifty gained about 0.52 percent as it closed the week around 42514. Its future gyrated between 42666 to 42100 and ended the week with gain of about 221 points.
Further diving into the Nifty upcoming Weekly expiry, Nifty immediate resistance stands at 18500 levels where nearly 77.87 lakh shares is the open interest followed by vital resistance at 19000 levels where about 91.65 lakh shares is the open interest.
On the lower side immediate support level is at 18300 where nearly 69.63 lakh shares is the PE options open interest followed by 18000 where nearly 66.77 lakh shares is the PE options open interest.
Looking at the Bank Nifty upcoming Weekly expiry data, on the upside, immediate and vital resistance is at 43000 where nearly 24.14 lakh shares is the CE open interest, whereas, on the lower side immediate and vital support is at 42000 where 20.57 lakh shares is the PE open interest. The Maximum OI built-up in case of CE is at 42500, about 40.60 lakh shares.
India VIX, fear gauge, decreased to 14.32 from 14.41 over the week. It is trading at low levels. Decrease in VIX has allayed the fear in the market. Further, any uptick in India VIX could start the downward move in Nifty and vice versa.
Looking at the sentimental indicator, Nifty OI PCR for the week has dropped to 0.903 from 1.218. Bank Nifty OIPCR over the week increased to 0.926 from 1.159 compared to last Friday. Overall data indicates CE writers are more aggressive than PE writers in Nifty.
Moving further to the weekly contribution of sectors to Nifty. Private Bank and Information Technology contributed the most on positive side in Nifty i.e., by 131.55 and 131.91 points respectively. Oil & Gas and metal contributed about 14.31 and 9.54 points respectively on positive side in Nifty. Pharma and FMCG contributed 8.56 and 42.84 points on negative side respectively. Auto contributed about 35.71 points negatively in Nifty.
Looking towards the top gainer & loser stocks of the week in the F&O segment, Exide Industries topped by gaining over 7.6 percent, followed by Balrampur Chini Mills 6.9 percent, Honeywell Automation India 6.2 percent, Hindustan Aeronautics 6 percent, Whereas Sun TV Network lost -12.7 percent, Aarti Industries has lost over -9.4 percent, Mahindra & Mahindra Financial Services lost -8.8 percent over the week.
The upcoming week can be approached with a low-risk strategy like Modified Put Butterfly in Nifty.
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This trade idea was published on 21 Nov 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 21 Nov 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.