Deploy modified put butterfly strategy in Nifty
Any uptick in India VIX could accentuate the downward move in Nifty and vice versa.
Research by Quantsapp Advisory, SEBI-registered research analyst (Reg. No. INH000006332)
The upcoming week can be approached with a low-risk strategy like modified Put Butterfly in Nifty.
Shubham Agarwal
Nifty Future closes the week around 18,701, losing -1.05%. During the week, the index gyrated between 18,923 - 18,690.
On the other hand, Bank Nifty June Futures closed negative for the week around 43,680. Its future gyrated between 44,124 and 43,450. Overall, Bank Nifty ended the week negative, losing about -0.82%.
Further diving into the Nifty upcoming weekly expiry, Nifty immediate resistance stands at 18,800 levels where nearly 143.13 lakh shares is the open interest of CE options followed by vital resistance at 19,000 levels where about 100.21 lakh shares of CE options is the open interest. On the lower side, immediate support level is at 18,700 where nearly 75.05 lakh shares is the PE options open interest, followed by 18,500 where nearly 66.11 lakh shares is 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 44,000 where nearly 34.06 lakh shares is the CE open interest, whereas, on the lower side immediate and vital support is at 43,500 PE, about 38.25 lakh shares, which is the PE open interest.
Low risk strategy
India VIX and fear gauge increased to 11.21 over a week-to-week basis from 10.84. 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 0.929 from 1.293. Bank Nifty OIPCR over the week decreased to 0.884 from 0.991 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, Oil & Gas and FMCG, the contributions were down by -55.65 and -44.50 points, respectively. Auto contributed negatively to Nifty by -25.27 points while Metal and PSU Bank contributed negatively to Nifty by about -15.20 and -18.06 points respectively. NBFC contributed positively to Nifty by +11.27 points. Cement and Pharma contributed negatively to Nifty by -13.28 and -6.50 points, respectively, while Telecom contributed positively to Nifty by +10.12 points.
Looking towards the top gainer & loser stocks of the week in the F&O segment, Shriram Finance topped by gaining over 19%, followed by Piramal Enterprises 12.40% and Motilal Oswal Financial Services 7.8%. Meawhile, Adani Enterprises lost -11.10%, IDFC over -9.40%, and Ambuja Cement around -8% 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 26 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 26 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.
