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Deploy long call butterfly strategy in Nifty: Shubham Agarwal

Considering the sideways movement, this week can be approach with a low-risk strategy like Long Call Butterfly in Nifty

March 28, 2022 / 07:09 AM IST

After two consecutive weeks of upside move, and rising 10% from the recent bottom, Nifty consolidated in a range in the past week. Nifty shut shop with marginal loss of 0.64 percent around 17,211.

The Nifty futures during this week ranged from 17,464 to 17,051. On the OI (Open Interest) front, long Unwinding was witnessed in Nifty over the week gone by as there was marginal 3 percent drop in OI.

Another week of huge volatility, Bank Nifty also closed with a significant loss of more than 2 percent at around 35,650. Bank Nifty futures gyrated between 36,858 and 35,259 last week.

Overall, Bank Nifty ended the week with a loss of around 780 points and also witnessed short buildup on OI front in the week gone by.

Further, diving into Nifty's upcoming Weekly expiry, PE option writers showed aggression. Nifty's immediate resistance stands at 17,500 and vital resistance stands at the 18,000 levels where nearly 55 lakh and 79 lakh shares were added, respectively. On the lower side, immediate and vital support level is at 17,000 followed by 16,500 where nearly 46 lakh and 47 lakh shares were added, respectively.


Looking at the Bank Nifty's upcoming weekly expiry data - on the downside, Bank Nifty's immediate resistance is at 36,000 where nearly 18 lakh shares have been added followed by vital resistance at 37,000 where nearly 18.5 lakh shares have been added. On the lower side, immediate support stands at 35,000 where nearly 10 lakh shares have been added followed by vital support at 34,000 with 14-lakh share addition.

India VIX still trading higher, increasing marginally by 2% from 22.61 to 23.09 over the past week. Cool off in the VIX has given relaxation to the market. Further, any downticks in India VIX can push the momentum upwards in Nifty.

Looking at the sentimental indicator, Nifty OI PCR for the week has decreased to 0.938 from 1.323. Bank Nifty OIPCR over the week decreased from 0.893 to 0.681 compared to last Friday. Overall, data indicates CE writers are more aggressive than PE writers in Nifty.

Moving further to the weekly contribution of sectors to Nifty, there was mixed contribution towards Nifty from all sectors. Oil, Metals, and IT contributed the most on the positive side in the Nifty by 98.83, 29.39, 23.83 points, respectively, while only PVTB, FMCG and NMFC contributed negative to Nifty by 120.37 and 54.46 respectively.

Looking towards the top gainer & loser stocks of the week in the F&O segment. L&T Finance Holdings topped by gaining over 14.9%, followed by ZEE 14.5%, Aurobindo Pharma 11.8%. Whereas, JK Cement has lost over -8.9%, Marico -8.9%, MFSL -8.7% over the week.

Considering the sideways movement, this week can be approach with a low-risk strategy like Long 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: Mar 28, 2022 07:09 am
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