On the daily chart the index has formed a bearish candle with
a long upper shadow indicating selling pressure and resistance at higher
levels. The index is floating in a higher top and higher bottom formation on
the daily chart indicating an ongoing uptrend. The chart pattern suggests that
if the Nifty 50 crosses and sustains the 17900 level there would be buying that
would lead the index towards the 18000-18100 levels. However if the index falls
below the 17700 level there would be selling that would take the index towards
17600-17500. Nifty is trading above its 20-day SMA which indicates a bullish
bias in the near-term. Nifty remains in an uptrend in the short-term so buying
on the downside remains our preferred strategy. The daily strength indicator
RSI is moving up and above its reference line indicating a positive bias.Nifty
to remain in uptrend use bull call strategy to make profits on F&O expiry; Nifty Put options OI distribution shows that 17500
has highest OI concentration followed by 17800 & 17600 which may act as
support for current expiry
Nifty Derivative Outlook:
The current series of Nifty 50 witnessed a short covering
with the price up 1.84% and the OI down 17% on Wednesday with 21.26 lakh shares
of the OI settled up from 122.67 lakh 101.41 lakh shares declined. Nifty's
month-to-date rollover today is 15.64% while the Nifty Put Call Ratio a
sentiment indicator used by traders to gauge market sentiment and sentiment is
currently 0.86 compared to 1 07 of the last week suggesting a flat to negative
move .India Vix a market volatility indicator often referred to as a fear gauge
is currently trading at 19.02% compared to 20.56% over the last week.
Nifty ATM options implied volatility for the current series
is 18.12% as opposed to 19.35% last week indicating low volatility on both
sides in the expiry session. Nifty put options OI distribution shows that 17500
has the highest OI concentration followed by 17800 & 17600 which could
serve as support for the current expiry and on the call front 18000 followed by
18100 & 17900 experienced significant OI concentration and may act as
resistance to the current decline.
On weekly options call writing was observed at 18100 strikes
followed by 18000 and 17900 while on the put side noticeable writing activity
was observed at 17700 17500 and 17800 strikes. Options data points to an
immediate range between 18100 and 17500 levels.
Nifty Strategy
The strategy we are proposing for this weekly expiration on
April 13th is a moderately bullish strategy called CALL LADDER which involves buying
one lot of NIFTY 17850 Call @ 158 and selling one lot each of 18000 Call @ 95
and one lot includes 18150 call @ 54. The cost of the strategy includes an
outflow of Rs 450 which is the maximum loss if NIFTY trades and stays below 17860
at expiry. The maximum profit of Rs 7050 is reached at 18000 while the strategy
starts making losses above 18300 hence it is advisable to exit the strategy
completely to avoid UNLIMITED losses above 18300. The strategy's break-even
points are 17859 on the upside and 18291 on the downside.