F&O Radar| Deploy Short Strangle in Nifty to gain from range-bound action
Sensex and Nifty50, rebounded from a slow start to close at fresh record highs on Thursday, driven by gains in index heavyweights like Reliance Industries, as well as financial and IT stocks.
The 30-share BSE benchmark Sensex advanced 349 points or 0.43% to settle at 82,134. The broader NSE Nifty gained 99.6 points or 0.40% to end at 25,152.
“Nifty is in an overextended phase. We believe the markets are in a corrective phase until a new setup matures. Resistance for the same is placed at 25330 spot closing levels,” said Sahaj Agrawal, Senior Vice President: Head of Derivatives Research at Kotak Securities.
Mixed sentiments are seen in global markets. Nikkei is expected to underperform whereas DAX remains in a corrective phase.
“US index DJIA is expected to witness volatility with resistance seen at around 41800 levels. China and Hong Kong markets continue to consolidate at multi month low levels with lack of momentum seen since a long time,” said Agrawal.
Open Interest concentration is seen at the 25000 put and 26000 call for the upcoming weekly series. Short term momentum parameters are overbought suggesting the possibility of high volatility.
“We believe Nifty50 has resistance placed at 25330 levels below which we remain in a corrective phase. Since Liquidity and earnings parameters remain in place, expect time consolidation with high volatility within a range for the near term. Immediate support on the downside is placed at 24800 while resistance as mentioned is seen at 25330 levels,” says Sahaj Agrawal.
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