Nifty has started the new series with relatively higher open interest than the last month. Moreover, roll spread has remained on the higher side throughout the settlement week and despite profit booking seen, it hasn’t declined much. The premium in Nifty is still near 90 points which does not bode well for sharp upsides. Hence, a round of consolidation can be expected before a fresh directional move.
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Strategy Positions: Buy 1 lot Nifty 01 September 17300 Call at 127 & sell 2 lots 01 September 17600 Call at 27, Total premium in-flow: 73; Target: 250; Stop loss: 10.
Rationale
From the options space, like last week, Call writing remained significantly higher compare to Put strikes and 17700 strike remained the highest Call base. We believe VWAP levels of the last series should remain an immediate hurdle for Nifty.
Nifty has started the new series with relatively higher open interest than the last month. Moreover, roll spread has remained on the higher side throughout the settlement week and despite profit booking seen, it hasn’t declined much. The premium in Nifty is still near 90 points which does not bode well for sharp upsides. Hence, a round of consolidation can be expected before a fresh directional move.
Keeping the recovery target for Nifty between 17600 to 17700, we feel traders can go for Bull ratio spread strategy where maximum profit will be made near 17600. However, one needs to be careful on the higher side also as strategy will start making a loss if Nifty moves above 17800 in the current weekly settlement.
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(Raj Deepak Singh is Analyst – F&O, ICICIdirect.)
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
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