F&O Radar: Deploy Bull Call Ladder on Nifty to benefit from lower-level bounce
Nifty has continuously gained on charts making higher highs and higher lows. The index made its new all-time high of 23,110 on Monday.
The index has shown some correction since hitting its all-time high and closed very close to its 10-DEMA at 22,700.
Since January, the index has been trading in an upward-sloping parallel channel and every time the index hits a new lifetime high it reverses back to the lower end of the range.
“Now, the Index has reversed from the upper end of the range as well as broken the crucial support of 22,800 levels, so the upside looks capped from the expiry point of view as there are resistances at each 100 points on the upside from 22,800 levels to 23,000 levels,” said Jay Thakkar, VP & Head of Derivatives and Quant Research at ICICI Securities.
The crucial support on the lower side is Rs 22,500. Hence the range for the index for monthly expiry is Rs 22,500 to Rs 23,000 levels, Thakkar added.
Highest outstanding OI
Highest Call OI — 22,700 (1,43,398); 22.800 (3,18,580); 22,900 (3,38,238)
Highest Put OI — 22,700 (2,22,092); 22,600 (2,18,286); 22,500 (3,24,357)
The US markets are trading weak and some bounce is expected there as well as Indian markets may witness some support from the lower levels which could result in a volatile day but ultimately end up within a narrow range of Rs 22,600- Rs 22,800 levels.
Thakkar suggests that as the upside looks capped and a bounce from lower levels is expected, deploying a bull call ladder with a credit spread is an ideal strategy wherein some
