F&O Radar| Deploy Bull Condor in Nifty to gain from northward journey
Nifty embarks on the first principle of trend following as the uptrend is likely to continue. Post a dramatic wave of volatility comes a time of complacency, as Vix cools off, and investors readjust to all the sentiments that were out during the last two weeks.
The breadth looks positive with more than 70% of stocks in the broader universe above their key short-term and mid-term Moving averages pointing to upside bias while the Advance decline percent has seen a thrust above 75 indicating strong momentum.
“Nifty recouped every loss and we maintained buy on dips in our previous week with a range of 23200 on the downside to 23500, and guess what, we are now shifting upwards. The sideways consolidation that we are seeing is rotation of money to better investment avenues, new leaders, and stronger outperforming stocks which will lead the next rally” says Shrey Jain, Founder & CEO of SAS Online.
Open Interest for the 20th June weekly Expiry points to an upside range of 23,500 & 24,000 where positions are concentrated while on the downside it is 23,300. The Vix is down to lower levels of 12.82 and may see a further shift to 11.20. The ATM IV for Nifty 23450 Strike is at 9.39 indicating a mere range of 280 points, Jain said
Jain believes that the 23,200 is now the line in the sand technically for this fresh buying to continue towards the north. The upside projections (in an uncharted zone) as per Fib and price points to the next level of 23,680 – 23,789.
Given this scenario, he recommends a Bull Condor Strategy.
Bull
