Deploy modified Put Butterfly strategy in Nifty: Shubham Agarwal

Any uptick in India VIX could accentuate the downward move in Nifty and vice versa.

The Nifty has closed the week, at around 18,570, gaining about 1.47%. During the week, Nifty gyrated between 18,590 and 18,270. On the OI (Open Interest) front, long build-up was witnessed in Nifty Futures over the week gone by as there was an increase in OI, with gains witnessed in Nifty weekly closing basis.

On the other hand, Bank Nifty June Futures closed almost flat at gains of about 0.06% as it closed the week around 44,070. Bank Nifty future gyrated between 44,905 and 43,455, over the course of last week. Overall, Bank Nifty ended the week flat.

Further diving into the Nifty upcoming weekly expiry, Nifty's immediate resistance stands at 18,700 levels where nearly 64.78 lakh shares is the open interest of CE options followed by vital resistance at 19,000 levels where about 67.16 lakh shares of CE options is the open interest. On the lower side, immediate support level is at 18,400 where nearly 98.01 lakh shares is the PE options open interest followed by 18,300, where nearly 99.36 lakh shares is the PE options open interest.

Looking at the Bank Nifty upcoming weekly expiry data, on the upside, immediate and vital resistance is at 44,500, where nearly 22.72 lakh shares is the CE open interest, whereas, on the lower side immediate and vital support is at 43,500, about 27.16 lakh shares, which is the PE open interest. There is a substantial OI at 44,000 CE and PE of 37.85 lakh and 32.89 lakh shares, respectively.

India VIX, fear gauge, decreased to 11.90 over a week-to-week basis from 12.30. Further, any uptick in India VIX could accentuate the downward move in Nifty and vice versa.

Positive contributions

Looking at the sentimental indicator, Nifty OI PCR for the week has increased to 1.367 from 1.009. Bank Nifty OIPCR, over the week, increased to 1.185 from 1.15 compared to last Friday. Overall data indicates PE writers are more aggressive than CE writers in Nifty.

Moving further to the weekly contribution of sectors to Nifty; all sectors contributed positively except Private Bank, which contributed negatively by 13.93 points. IT and FMCG contributed positively by +78.04 and +69.80 points, respectively. Oil & Gas also contributed positively to Nifty by +59.10 points. Pharma and Auto contributed positively to Nifty by about +35.67 and +22.45 points respectively. Capital Goods contributed positively to Nifty by +10.55 points.

Nifty monthly rollover stands 65.38% in the May to June series expiry, while, correspondingly, Bank Nifty rollover stands at 75.83%. Berger Paints has the highest stock wise rollover at 97.76%, followed by Page Industries and UBL with rollover standing at 95.10% and 95.06%, respectively, while Cipla has the lowest rollover of 59.38% followed by HUL and Oberoi Realty at 61.63% and 62.24%, respectively.

Top gainers and losers

Looking towards the top gainer & loser stocks of the week in the F&O segment, Adani Enterprises made significant strides by gaining over 30.60%, followed by Dixon Technologies at 21.10%, and Divis Lab at 13.50%. Meanwhile, Page Industries lost 10.30%, Ashok Leyland over 5.20%, and Siemens lost 4.60% over the week.

The upcoming week can be approached with a low-risk strategy like modified Put Butterfly in Nifty.

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