Indian benchmark indices have recently experienced profit booking, influenced by renewed geopolitical tensions between the US and Iran, alongside broad profit-taking in heavyweight sectors. This cautious sentiment precedes the monthly expiry, with investors seeking fresh domestic and global triggers.
Kotak Securities' Nifty Outlook
Sahaj Agrawal, Head of Derivatives Research at Kotak Securities, anticipates a range-bound session for Nifty on its monthly expiry day. He identifies major support for the Nifty at 23,780, with resistance levels between 24,150-24,200, and a stronger barrier near 24,250. Agrawal suggests that significant downside is unlikely unless the 23,780 level is breached, which could lead to a fall towards 23,650.
Last week saw markets trading conservatively. After an initial sell-off, bulls attempted a recovery, but selling pressure re-emerged, capping upside gains. The Nifty50 closed at 23,946.25, declining 109.75 points (0.46%) on Monday. The Nifty Bank index also fell by 450 points (0.77%) to 57,727.35, while India VIX, the volatility gauge, rose by nearly 4.3% to 13.61.
Recommended Options Strategy
For the June series monthly expiry, Agrawal recommends a Nifty short strangle strategy. This involves simultaneously selling a call option and a put option with different strike prices but the same expiry date.
- Sell Call Option: 24,300
- Sell Put Option: 23,650
This strategy is expected to result in an inflow of Rs 17. Investors are advised to follow a strict stop loss of Rs 35, with the target being the entire premium received.
"The combined technical and derivatives data suggests a range for today's expiry between the 23,800–24,150, with both extremes likely to hold on a closing basis," noted Agrawal.
The derivatives segment shows a heavy concentration of Open Interest (OI) at the 24,000 strike for both Calls and Puts, reinforcing the expected range.
Disclaimer
This information is provided for educational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.