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Deploy modified call butterfly strategy in Nifty: Shubham Agarwal

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

November 07, 2022 / 06:51 AM IST

The Nifty closes the week, around 18220, with a gain of around 2.19 percent. During the week Nifty gyrated between 17926 - 18229. On the OI (Open Interest) front, long built-up was witnessed in Nifty over the week gone by as there was an increase in OI.

On the other hand, Bank Nifty gained about 0.77 percent as it closed the week around 41465. Its future gyrated between 41,825 to 40,990. Overall, Bank Nifty ended the week with gain of about 315 points.

Further diving into the Nifty upcoming Weekly expiry, Nifty immediate resistance stands at 18300 levels where nearly 44.5 lakh shares is the open interest followed by vital resistance at 18500 levels where about 49.85 lakh shares is the open interest.

On the lower side immediate support level is at 18000 where nearly 86.53 lakh shares is the PE options open interest followed by 17800 where nearly 35.18 lakh shares is the PE options open interest. Max Call OI was witnessed at 19000 levels where about 88 lakh shares is the open interest.

Looking at the Bank Nifty upcoming Weekly expiry data, on the upside, immediate and vital resistance is at 41500 where nearly 28.88 lakh shares is the CE open interest, whereas, on the lower side immediate and vital support is at 41000 where 19.04 lakh shares is the PE open interest.

India VIX, fear gauge, decreased to 15.66 from 15.92 over the week. India VIX is trading at low levels. Decrease in India VIX has allayed the fear in the market. Further, any downtick in VIX can push the upward move in Nifty further and vice versa.

Looking at the sentimental indicator, Nifty OI PCR for the week is largely unchanged at 1.113 from 1.116. Bank Nifty OIPCR over the week increased to 0.9 from 0.711 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. Oil & Gas and NBFC contributed the most on positive side in Nifty i.e., by 139.66 and 99.72 points, respectively. FMCG and Information Technology contributed about 58.52 and 25.30 points, respectively on positive side in Nifty.

PSU Bank and Power contributed positively by about 14.14 and 11.67 points, respectively. Capital Goods and Metal contributed 19.34 and 10.75 points respectively on positive side in Nifty. No sector contributed negatively to Nifty.

Looking towards the top gainer & loser stocks of the week in the F&O segment. Adani Enetrprises topped by gaining over 15.3 percent, followed by Vedanta 13.9 percent, Dalmia Bharat 13.6 percent, Amara Raja Batteries 13.5 percent, whereas LIC Housing Finance lost -14.2 percent, Bandhan Bank has lost over -13.8 percent, Intellect Design Arena -13.7 percent, over the week.

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

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Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com 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: Nov 7, 2022 06:51 am