Deploy Modified Put Butterfly strategy in Nifty
Nifty immediate resistance stands at 19,600 levels where nearly 66.13 lakh shares is the open interest of CE options followed by vital resistance at 20,000 levels where about 60.11 lakh shares of CE options is the open interest.
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 August futures closed the week around 19,573, losing -0.90%. During the week, Nifty gyrated between 19,869 and 19,390. On OI (open interest) basis, the index decreased with OI also increasing, suggestive of short built-up.
On the other hand, Bank Nifty August Futures closed positive for the week around 44,970. Bank Nifty future gyrated from 45,944 to 44487. Overall, Bank Nifty ended the week negative, losing by about 1.59%.
Further diving into the Nifty upcoming weekly expiry, Nifty immediate resistance stands at 19,600 levels where nearly 66.13 lakh shares is the open interest of CE options followed by vital resistance at 20,000 levels, where about 60.11 lakh shares of CE options is the open interest. On the lower side, immediate support level is at 19,500 where nearly 55.50 lakh shares is the PE options open interest followed by 19,400, where nearly 65.22 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 45,000 where nearly 29.73 lakh shares is the CE open interest, whereas, on the lower side immediate and vital support is at 44,500 PE, about 21.54 lakh shares, which is the PE open interest.
India VIX, fear gauge, increased to 10.57 over a week-to-week basis from 10.14. 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 increased to 1.044 from 0.824. Bank Nifty OIPCR over the week increased to 0.817 from 0.735 compared to last Friday. Overall data indicates PE writers were more aggressive than CE writers in Nifty.
Moving further to the weekly contribution of sectors to Nifty, Private Bank and FMCG contributed negatively by -57.19 and -62.04 points respectively. Metal contributed negatively to Nifty by -3.12 points. Telecom and Capital Goods contributed negatively to Nifty by about -4.80 and -0.36 points, respectively. PSU Bank contributed negatively to Nifty by -41.02 points. Pharma contributed positively to Nifty by +3.28 points. Auto and Oil & Gas contributed negatively by -26.56 and -18.55 points respectively. Information Technology contributed positively to Nifty by about 75.45 points.
Looking towards the top gainer & loser stocks of the week in the F&O segment, Indiabulls Housing Finance topped by gaining over 22.20%, followed by Hindustan Copper 19 %, Laurus Labs 15.2%. Whereas Godrej Properties lost -12.40%, Vedanta has lost over -11.8%, Piramal Enterprises lost -10.20% 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 7 Aug 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 7 Aug 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.
