The Nifty Index opened positive above 25400 zones and after a slight slip in the initial hour, it rebuilt strength and touched the all-time high zones. It remained afloat in the second half of the session with consolidation at higher zones.
It formed a Doji sort of candle on a daily frame and has been forming higher lows from the last four trading sessions which indicates support is shifting higher.
“Now it has to hold above 25350 zones for an up move towards 25550 then 25750 zones whereas supports have shifted higher to 25300 then 25200 zones,” said Chandan Taparia, Senior VP, Equity Derivatives & Technicals, Wealth Management at Motilal Oswal.
On option front, Maximum Call OI is at 26000 then 25400 strike while Maximum Put OI is at 25000 then 25400 strike. Call writing is seen at 26000 then 25500 strike while Put writing is seen at 25400 then 25300 strike. Option data suggests a broader trading range in between 25000 to 25800 zones while an immediate range between 25200 to 25600 levels.
Overall one can play the positive to range bound stance and expect an up move towards 25600-25750 zones, Taparia added.
Given these data points and market setup, Chandan Taparia suggests deploying Bull Call Spread in Nifty to benefit from the bullish stance.
Bull Call Spread
A bull call spread is an options strategy used when a trader is betting that an asset will have a limited increase in price. The strategy uses two call options to create a range consisting of a lower strike price and an upper strike price.
(Prices as of September 17)
Below is the payoff graph of the strategy:
(Source: Motilal Oswal)
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
It formed a Doji sort of candle on a daily frame and has been forming higher lows from the last four trading sessions which indicates support is shifting higher.
“Now it has to hold above 25350 zones for an up move towards 25550 then 25750 zones whereas supports have shifted higher to 25300 then 25200 zones,” said Chandan Taparia, Senior VP, Equity Derivatives & Technicals, Wealth Management at Motilal Oswal.
On option front, Maximum Call OI is at 26000 then 25400 strike while Maximum Put OI is at 25000 then 25400 strike. Call writing is seen at 26000 then 25500 strike while Put writing is seen at 25400 then 25300 strike. Option data suggests a broader trading range in between 25000 to 25800 zones while an immediate range between 25200 to 25600 levels.
Overall one can play the positive to range bound stance and expect an up move towards 25600-25750 zones, Taparia added.
Given these data points and market setup, Chandan Taparia suggests deploying Bull Call Spread in Nifty to benefit from the bullish stance.
Bull Call Spread
A bull call spread is an options strategy used when a trader is betting that an asset will have a limited increase in price. The strategy uses two call options to create a range consisting of a lower strike price and an upper strike price.
(Prices as of September 17)
Below is the payoff graph of the strategy:
(Source: Motilal Oswal)
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
