Purchase Nifty August 17700 Put at 115 & promote August 17500 Put at 58, Whole premium out-flow: 57; Goal: 143; Cease loss: 12.5 (1 Lot Every).
Rationale
The Nifty closed marginally inexperienced final week regardless of revenue taking seen on Friday amid continued FIIs inflows. Name writers remained beneath stress all through the week as Put base proceed to strengthen. Broader markets additionally carried out consistent with headline indices as each small cap and midcap indices noticed beneficial properties of 1% every. Going forward, whereas knowledge factors remained optimistic, a spherical of consolidation could be anticipated close to psychological ranges of 18000 for Nifty and focus might shift in the direction of midcap and small cap indices.
Nifty futures open curiosity elevated sharply over final week and present OI is the very best seen over in a month. Whereas FIIs have liquidated some longs, retail individuals elevated their lengthy positions. We imagine, sturdy palms have booked some earnings after a robust transfer seen in the course of the sequence within the anticipation of some consolidation.
From the choices area, vital Name writing could be seen at ATM strikes with complete open curiosity of greater than 1 cr shares at each 17900 and 18000 Name strikes. For the primary time in the course of the sequence, we’re witnessing larger Name writing than the Put bases. Therefore one can count on some consolidation beneath 18000 throughout settlement and contemporary up leg could be seen provided that Nifty strikes above these ranges.
India VIX has remained sideways and consolidated close to 18 ranges all through the week. With outcome season nearly over, inventory particular actions more likely to stay in focus amid consolidation. We imagine that any revenue reserving ought to be restricted until 17500 ranges within the settlement week.
Pay-Off Diagram:
(The Writer, Raj Deepak Singh, is Analyst – F&O, ICICIdirect)
