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Deploy modified call butterfly strategy in Nifty: Shubham Agarwal

Considering the bullish momentum, upcoming week can be approached with a low-risk strategy like Modified Call Butterfly in Nifty

October 11, 2021 / 07:24 AM IST

After witnessing a sell-off in the week ended October 1, Nifty bounced back sharply with another rally of more than 2 percent last week. Nifty continued its uptrend and closed around 17,900.

However, it failed to make a fresh all-time high in the past week. The Nifty futures during this week ranged from 17,940 to 17,560. On the OI (open interest) front, long built-up was witnessed in Nifty over the week gone by.

On the other hand, Bank Nifty continued to consolidate within the broader range of 38,400-36,500. Bank Nifty shut shop with gain of 1.5% last week. On the OI front, short covering was witnessed in Bank Nifty over the week gone by.

Further diving into the Nifty's upcoming weekly expiry, Call writers are showing aggression by building more positions compared to Put writers. Nifty Vital resistance stands at the 18,000-levels with addition of nearly 36 lakh shares - highest among all - followed by immediate resistance at 18,600 with 33 lakh shares.

On the lower side, immediate support level is at 17,800 where nearly 32 lakh shares were added followed by 17,000 with addition of 30 lakh shares.


Looking at the Bank Nifty's upcoming weekly expiry data, on the upper side, immediate resistance stood at 38,000 (18L share) followed by 39,000 (14L shares). Whereas, on the downside, 37,500 (9L shares) was the immediate support level, followed by 37,000 (11L shares) as the vital support level.

India VIX, fear gauge, decreased around 8.50% from 17.21 to 15.75 over the week. India VIX is trading near the lowest level of pre-covid crash. Cool off in the IV has given relaxation to market. Further, any downticks in India VIX can push the upwards momentum in Nifty.

Looking at the sentimental indicator, Nifty OI PCR for the week has increased from 0.98 to 1.30. Bank Nifty OIPCR over the week increased marginally from 0.76 to 0.78 compared to last Friday. Overall data indicates more of put writers over put writers in Nifty.

Moving further to the weekly contribution of the sectors to Nifty. Most of the sectors contributed positively except metal, NBFC and power. Oil and IT collectively contributed around 250 points in Nifty approximately 291 points gain. Auto and PVTB were the top contributors followed by OIL and IT.

Looking towards the top gainer & loser stocks of the week in the F&O segment, IRCTC topped by gaining over 27.2%, followed by Deepak Nitrite 21.20%, Bandhan Bank 18.70%. Whereas, Cipla has lost over 6.7%, Shree Cements 4.20 %, Grasim -4.10% over the week.

Considering the bullish momentum, upcoming week can be approached with a low-risk strategy like Modified Call Butterfly in Nifty.



Disclaimer: The views and investment tips expressed by experts on are their own and not those of the website or its management. advises users to check with certified experts before taking any investment decisions.
Shubham Agarwal is a CEO & Head of Research at Quantsapp Pvt. Ltd. He has been into many major kinds of market research and has been a programmer himself in Tens of programming languages. Earlier to the current position, Shubham has served for Motilal Oswal as Head of Quantitative, Technical & Derivatives Research and as a Technical Analyst at JM Financial.
first published: Oct 11, 2021 07:24 am

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