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)
Nifty Futures closed the week ended June 9 almost flat at 18,630. The Nifty gyrated between 18,842 and 18,605 during the week.
On the other hand, Bank Nifty June Futures closed flat for the week around 44,110 and gyrated between 44,042 and 44,545. Overall, Bank Nifty ended the week almost flat.
Further diving into the Nifty upcoming weekly expiry, the immediate resistance stands at 18,700 levels where nearly 155.28 lakh shares is the open interest of CE options, followed by vital resistance at the 18,800 levels where about 77.53 lakh shares of CE options is the open interest. On the lower side, immediate support is at 18,600, where nearly 75.76 lakh shares is the PE options open interest, followed by 18,300 where nearly 48.08 lakh shares is the PE options open interest. There is a substantial OI (open interest) at 18,700 PE with about 65.27 lakh shares.
Looking at the Bank Nifty upcoming weekly expiry data, on the upside, Bank Nifty immediate and vital resistance is at 44200 where nearly 26.91 lakh shares is the CE open interest, whereas, on the lower side immediate and vital support is at 44,000 PE, about 37.16 lakh shares, which is the PE open interest.
India VIX, fear gauge, decreased to 11.12 over a week-to-week basis from 11.13. 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 0.836 from 0.953 and Bank Nifty OIPCR over the week decreased to 0.766 from 0.799 compared to last Friday. Overall data indicates PE writers were less aggressive than CE writers in Nifty.
Moving further to the weekly contribution of sectors to Nifty; IT and FMCG contributed negatively by -79.99 and -25.82 points respectively. Oil & gas contributed positively to Nifty by +10.77 points. Private Bank and Power contributed positively to Nifty by about +11.37 and +17.18 points respectively. Capital Goods contributed positively to Nifty by +36.05 points. PSU Bank and Pharma contributed negatively to Nifty by -7.13 and -4.94 points respectively.
Looking towards the top gainer & loser stocks of the week in the F&O segment, HAL topped by gaining over 16.90 percent, followed by India Cements 7.70 percent, Tata Communications 6.90 percent. Whereas IEX lost -19.90 percent, Mphasis has lost over -7.70 percent and Persistent lost -6.20 percent over the week.
The upcoming week can be approached with a low-risk strategy like modified Put Butterfly in the Nifty.
This trade idea was published on 12 Jun 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 12 Jun 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.