Home Share Market Nifty under 16300 might tumble to 15700, use Iron Butterfly for beneficial properties; Bank Nifty unfavourable in short-mid time period

Nifty under 16300 might tumble to 15700, use Iron Butterfly for beneficial properties; Bank Nifty unfavourable in short-mid time period

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By Rajesh Palviya

NSE Nifty 50 index began the earlier week on a flat be aware and promoting strain all through the week dragged the index to shut at its lowest level. Nifty 50 closed at 16411 with a lack of 691 factors on a weekly foundation. On the weekly chart the index has shaped a protracted bearish candle forming decrease High-Low in comparison with earlier week indicating weak point at present ranges. The  chart sample means that if Nifty crosses and sustains above 16600 degree it could witness shopping for which might lead the index in direction of 16800-17100 ranges. However if the index breaks under 16300 degree it could witness promoting which might take the index in direction of 16000-15700.  

For  the week, we count on the Nifty to commerce within the vary of 16600-15700 with a unfavourable bias.  The  each day and weekly power indicator RSI is shifting downwards and is quoting under its reference line indicating unfavourable bias.  

Nifty Derivative Outlook

Nifty futures closed at 16419 on a unfavourable be aware with 4.86% enhance within the open curiosity  indicating Short Build Up. Nifty Futures closed at a premium of 08 factors in comparison with the day gone by premium of 12 factors. FIIs have been Sellers in Index Futures to the tune of 2490 crore and have been Buyers in Index Options to the tune of 5041 crore, Sellers within the Stock Futures to the tune of 268 crore. Net Buyers within the spinoff phase to the tune of 2232 crore.

India VIX index is at 21.25 v/s 20.20. Nifty ATM name choice IV is presently 15.72 whereas Nifty ATM Put choice IV is quoting at 22.32. Index choices PCR is at 0.74 v/s 0.73 & F&O Total PCR is at 0.76.

Nifty Put choices OI distribution reveals that 16000 has highest OI focus adopted by 16500 & 16200 which can act as help for present expiry.  Nifty Call strike 16900 adopted by 16800 witnessed vital OI focus and will act as resistance for present expiry.

Nifty Bank Outlook 

Bank Nifty began the week with a downward hole and promoting strain all through the week led the index to finish on a weak be aware. Bank Nifty closed at 34591 with a lack of 1497 factors on a weekly foundation. On the weekly chart the index has shaped a protracted bearish candle forming decrease High-Low in comparison with earlier week and has closed under its low indicating weak point at present ranges. The chart sample means that if Bank Nifty crosses and sustains above 35200 degree it could witness shopping for which might lead the index in direction of 35600-36000 ranges. However if index breaks under 34000 degree it could witness promoting which might take the index in direction of 33000-32500.

Bank Nifty is buying and selling under 20, 50, 100 and 200 day SMA that are essential quick time period shifting averages, indicating unfavourable bias within the quick to medium time period

For  the week, we count on Bank Nifty to commerce within the vary of 35200-32500 with a unfavourable bias. 

Bank Nifty Derivative Outlook

Bank Nifty closed at 34632 on a unfavourable be aware with 7.53% enhance in open curiosity indicating Short Build Up. Bank Nifty Futures closed at a premium of 41 factors in comparison with the day gone by premium of 19 factors. 

Bank Nifty Put choices OI distribution reveals that 35000 has highest OI focus adopted by 34500 & 34800 which can act as help for present expiry. BankNifty Call strike 35000 adopted by 34500 witnessed vital OI focus and will act as resistance for present expiry.

Sectors to stay bearish

We count on the market to indicate bearish behaviour close to time period. Sectors like IT, Banking, Capital items, Metals might present weak point and moreover correction in close to time period.

How to commerce the NSE Nifty 50 index? 

The technique which we’re suggesting for the week with expiry schedule on twelfth May 2022 is IRON BUTTERFLY, which entails promoting of 1 lot of Nifty 16,400 Call @ 187 & promoting of 1 lot of Nifty 16,400 Put @ 175 and concurrently shopping for one lot of 16,800 Call @ 38 & shopping for one lot of 16,000 put @ 57. Both danger and reward on this technique are restricted and the beneficial properties within the technique will probably be accrued between two ranges i.e 16,700 on upside & 16,100 on draw back. The assumption for this technique is that, Nifty is more likely to remain-trade & conclude weekly expiry in and round 16400 degree. Maximum revenue of Rs 13,350 will occur if the Nifty closes and expires at 16,400. On the opposite hand if Nifty expiry shut is above 16,667 (higher bep) or under 16,133 (decrease bep) then most loss incurred will probably be Rs 6,650.

(Rajesh Palviya, VP – Research (Head Technical & Derivatives), Axis Securities. Views expressed are the writer’s personal.)

Source: www.financialexpress.com”