Promote twenty seventh April Nifty 17900 Name at 121-125 & Promote twenty seventh April 17900 Put at 136-140, Goal: 100, Stoploss: 360 Time Body: until expiry.
Rationale
The Nifty prolonged its good points by one other 1% in a truncated final week and examined our targets of 17800, pushed largely by brief protecting. As soon as once more, monetary shares have been main gainers of the week, together with midcap and small caps, which continued their momentum within the new monetary yr. Going forward, we anticipate the Nifty to consolidate with assist close to 17500 amid outcomes from heavyweights.
From a knowledge perspective, the present open curiosity within the Nifty is sort of at a one-year low as brief closure continued in the course of the sequence. FIIs’ internet shorts have declined to simply 40,000 contracts from 1.95 lakh contracts seen in mid-March. Therefore, we imagine {that a} recent accumulation of positions might present additional cues for directional motion.
Additionally, regardless of the Nifty buying and selling above 17800, Name writing was comparatively increased than Places suggesting expectations of restricted upsides. The best Name base is positioned at 18000 strikes. Therefore, in case the short-covering development continues, a transfer in direction of these ranges can’t be dominated out. Nonetheless, we imagine the Nifty will exhibit a range-bound motion within the coming periods
The volatility index (India VIX) remained low close to 12 ranges all through the week, with US VIX, which has moved in direction of 19 ranges. Therefore, an uptick in volatility can’t be dominated out, which can end in marginal revenue reserving in coming periods
As we’re protecting our view vary certain, we advise merchants to go for a brief straddle. It’s a 2 leg possibility technique and consists of promoting one ATM strike of the Name possibility and Put possibility.
Commerce might be in revenue if the expiry comes between the vary of 17640 to 18160 ranges. Nonetheless, merchants ought to be cautious as soon as the given vary breaks
