By Rajesh Palviya
The chart pattern suggests that if NSE Nifty 50 crosses and sustains above 18000 level it would witness buying which would lead the index towards 18100-18400 levels. However, if the index breaks below 17600 level it would witness selling which would take the index towards 17500-17300. For the week, we expect Nifty to trade in the range of 18400-17400 with a positive bias. The daily and weekly strength indicator RSI is above its respective reference lines indicating positive bias.
The chart pattern suggests that if Bank Nifty crosses and sustains above 40700 level it would witness buying which would lead the index towards 41200-42000 levels. However if index breaks below 40000 level it would witness selling which would take the index towards 39500-39000. For the week, we expect Bank Nifty to trade in the range of 42000-39500 with a positive bias. The daily and weekly strength indicator RSI is moving upwards and is quoting above its reference line indicating positive bias.
Sectors and stocks to watch this week
We expect sectors like Banking & Financial, automobiles, real estate, capital goods, chemicals may show bullishness. One can focus on stocks like State Bank of India (SBI), Bank of Baroda, RBL Bank, DLF, Oberoi Realty, M&M, Eicher Motors, TVS Motors, Siemens, Nocil, Deepak Nitrite for bullish trades.
Also read: CPI inflation likely to reverse 3-month downtrend in Aug on high food prices; WPI seen in double-digits
NSE Nifty 50 trading strategy for 15 Sep F&O expiry week
The strategy which we are suggesting for the week with expiry schedule on 15 September 2022 is IRON BUTTERFLY, which involves selling of one lot of Nifty 17,850 Call @ 134 and selling of one lot of Nifty 17,850 Put @ 135 and simultaneously buying one lot of 18,200 Call @ 20 & buying one lot of 17,500 put @ 34. Both risk and reward in this strategy are limited and the gains in the strategy will be accrued between two levels i.e 18,050 on upside & 17,650 on downside. Maximum profit of Rs 10,750 will happen if the Nifty closes or expires at 17,850. On the other hand, if Nifty closes the expiry day above 18,065 (upper bep) or below 17,635 (lower bep) then strategy will start making loss; while any close above 18,200 or below 17,500 then the max loss will be restricted to Rs 6,750.
Also read: Nifty looks set to hit 18160-18600 in near term, Bank Nifty shows upmove; watch out for these levels
(Rajesh Palviya, Vice President – Research ( Head Technical & Derivatives), Axis Securities. Views expressed are the author’s own.)