Nifty likely to inch higher, deploy ‘Bull Call Spread’ in a truncated week: Quantsapp

The upcoming weekly series has strong put writers at 10,800 that is acting as immediate support for the market

The geopolitical tension along with February expiry led to wild swings in the market as Nifty made a low of 10,729 and witnessed a high of 10,939 during the last week, and ended below 10,900.

The Nifty50 ended the February series with loss of 0.36 percent at 10,792 vis-à-vis January series. Bank Nifty saw a fall of 1.84 percent during the same period. The Nifty rollovers stood at 60 percent, which was 13 percent below the 3-month average.

Lack of momentum in the market pushed the Open Interest (OI) tally to almost a year low.

February series saw Nifty Media as top performing sector led by stellar moves in Dish TV and Zee.

he Nifty Auto index was the next best performer with two-wheelers and auto- ancillary outperforming. The Nifty PSU banks were the worst performer led by fall in IDBI and Bank of India.

Top rollover stocks are SiemensCan Fin HomesPVRSRFNIIT Tech and Hexaware witnessing over 97 percent OI PCR on a combined basis.

Option OI fell back in the range of 10,700-11,000. The upcoming weekly series has strong Put writers at 10,800 that is acting as immediate support for the market.

Convincing move beyond 11,000 could lead to smart covering by Call writers. Considering Nifty options built-up is conducive of the ongoing upward momentum to continue to 11,000 and above levels, while weekly Put’s open interest at 10,800 could keep downside protected at the current level.

Thus, it is prudent to deploy ‘Bull Call Spread’. Bull Call Spread is a bullish strategy that expects a positive move in underlying. It’s an idle strategy to play for positive bias along with being completely hedged.

Under this strategy, we buy 1 lot lower strike Call and selling 1 lot of highest strike Call. Maximum profit is the difference in strikes less net outflow. Lower end loss is restricted to initial outflow.


Disclaimer:-The views and investment tips expressed by investment experts are their own. Ripples Advisory advises users to check with certified experts before taking any investment decisions.

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