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)
Capital gains from debt funds and certain other categories of non-equity MFs are set to be taxed at a higher rate.
Shubham Agrawal
Nifty closes the week, around 16940, losing about 1%. On the OI (Open Interest) front, short built-up was witnessed in Nifty Futures over the week gone by as there was an increase in OI, with losses witnessed in Nifty weekly closing basis.
On the other hand, Bank Nifty Futures lost about 0.90% as it closed the week around 39383 and gyrated between 39077 to 40273. Overall, Bank Nifty ended the week with a loss.
Further diving into the Nifty upcoming weekly expiry, Nifty immediate resistance stands at 17100 levels where nearly 98.68 lakh shares is the open interest of CE options followed by vital resistance at 18000 levels where about 128.36 lakh shares of CE options is the open interest. On the lower side immediate support level is at 16800 where nearly 52.86 lakh shares are the PE options open interest followed by 16500 where nearly 57.78 lakh shares are 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 40000 where nearly 32.01 lakh shares are the CE open interest, whereas, on the lower side immediate and vital support is at 39000, about 20.30 lakh shares, which is the PE open interest.
India VIX, fear gauge, increased to 15.24 over a week-to-week basis from 14.77. India VIX had increased to 16.01 levels during the week. 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 decreased to 0.783 from 0.875. Bank Nifty OIPCR over the week decreased to 0.718 from 0.833 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 and Oil & Gas contributed negatively by -82.85 and -30.57 points, respectively. Metal also contributed negatively to Nifty by -17.93 points. Auto and PSU Bank contributed negatively to Nifty by about -15.12 and -22.58 points, respectively. Capital Goods contributed negatively to Nifty by -12.86 points. Pharma and Cement contributed positively to Nifty by 3.68 and 2.83 points, respectively.
Looking towards the top gainer & loser stocks of the week in the F&O segment, Aurobindo Pharma topped by gaining over 4.3%, followed by Manappuram Finance 4%, HDFC Life 3.8%. Whereas GMR Infra lost -9.8%, Mphasis has lost over -8.1%, LIC Housing Finance lost -8.1% over the week.
The upcoming week can be approached with a low-risk strategy like modified Put Butterfly in Nifty.
This trade idea was published on 27 Mar 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 27 Mar 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.