The Indian markets saw this impact and opened down on Monday but sustained the levels as the uncertainty and panic subsided.
Witnessing the recovery in Friday’s session after a volatile week, the index as well as stocks have shown recovery and analysts believe that a potential upward movement can be foreseen.
Here are two options strategies from analysts to gain from these potential rise in the Nifty as well as Apollo Hospitals:
Bull Call Spread in Nifty suggested by Shrey Jain, Founder & CEO of SAS OnlineNifty, on a weekly scale, made a Pinbar pattern with a long lower shadow indicating the buying at lower levels of 24000 – 23950 while on upside managed to close near week high.
Technically, the market is ranged between 24400 – 24000 as ADX is declining below 25 and RSI on a lower time frame indicates exhaustion in momentum.
“The Anchored Vwap from June first week indicates strong support at 23919 while on the higher side it is at 24401. This is the range in the short term as we have truncated the week,” said Shrey Jain.
“OI indicates the broader range of 24000 – 24500 while fresh short build in PE at 24400 – 24300 indicates we may see some upside. Similarly on downside 24400 and 24600 is the support for bulls with long build up in CE,” Jain added.
For the coming week, traders can deploy a Bull call spread in Nifty as Shrey Jain believes that the index can test 24680 – 24700.
Bull Call Spread
A bull call spread is an options trading strategy that uses two call options. It is usually deployed when a trader anticipates a moderate rise in the underlying asset’s price.
ETMarkets.comBelow is the payoff graph of the strategy:
ETMarkets.com(Source: SAS Online)
Bull Call Spread in Apollo Hospitals by Madhu Bansal, Founder of The Finberg
The stock has been consistently taking support at the EMA 20 levels on a daily basis with today’s move confirming the same.
“A good buying pressure was seen throughout the day on Friday along with strong support seen at 6530 levels,” said Madhu Bansal.
Stochastic RSI (Fast) is in the oversold level of 20 but does not have enough momentum to move downward. F&O data suggests long buildup with a PCR of 0.6.
“The stock has outperformed Nifty 50 by 4% & above in the last 1 month. The mutual fund institutions have consistently shown interest in the stock even in the recent quarter of June 2024,” Bansal added.
Given this, Madhu Bansak suggests deploying a Bull Call Spread/ Debit Spread in the stock:
ETMarkets.comExit:
A trader will exit this position by selling the bought call and buying the sold call and the profit is made if the spread is sold more than it was purchased. Anybody who will be trading these strategies for the first time can look for booking profits on the first target itself.
Below is the payoff graph of the strategy:
ETMarkets.com(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
