CHANDAN TAPARIA
DERIVATIVE ANALYST, MOTILAL OSWAL
What should investors do this week?
Investors are suggested to use the dip as buying opportunity and go bargain hunting in selective private bank, auto, consumption, energy and oil & gas space. Index traders can initiate Bear Put spread in weekly series buying 17,300 put and selling 17,100 put with premium cost of around 65 points. Positive setup could be seen in Tata Steel, Hindalco, IndiGo, IndusInd Bank and Aurobindo Pharma; while weakness is likely in Jubilant FoodWorks, Dr Lal PathLabs, Motherson Sumi, Indiabulls Housing Finance, Balkrishna Industries, Havells, Deepak Nitrite, DLF, RBL Bank and Godrej Consumer Products. Bank Nifty failed to hold its recovery post the RBI policy meet as it drifted lower after hitting high of 39,200 zones. It formed a doji candle on weekly scale with long lower shadow which indicates declines are being bought but follow-up buying is clearly missing. It has to hold above 38,500 zones to witness an upmove towards 38,850 and 39,500, whereas support exists at 38,250 and 38,000 zones.
RAJESH PALVIYA
HEAD-TECHNICALS AND DERIVATIVES, AXIS SECURITIES
What should investors do this week?
We are suggesting the Iron Butterfly strategy with expiry scheduled on February 17, which involves selling of one lot of Nifty 17,350 call at Rs 156 and selling of one lot of Nifty 17,350 put at Rs 140 and simultaneously buying one lot of 17,650 call at Rs 41 and buying one lot of 17,050 put at Rs 51. Both risk and reward in this strategy are limited and the gains in the strategy will be accrued between two levels i.e 17,550 on upside and 17,150 on downside. The assumption: Nifty is likely to remain-trade and conclude weekly expiry in the range of 17,600 to 17,100. Maximum profit of Rs 10,200 will happens if the Nifty closes/ expires at 17,350. On the other hand, if Nifty expiry close is above 17,554 or below 17,146 then maximum loss incurred will be Rs 4,800.
RAHUL SHARMA
DIRECTOR & HEADTECHNICAL DERIVATIVES RESEARCH, JM FINANCIAL SERVICES
What should investors do this week?
Traders are advised to trade with a short bias below 17,300 on Nifty and 38,500 on Bank Nifty. Nifty supports are placed at 17,150 and 17,043; while Bank Nifty supports are seen at 38,100 and 37,700. Resistance levels are placed at 17,500 and 38,900. Volatility is expected to be high and traders can look to initiate long strangles with 17,200 puts and 17,500 calls of February 24 expiry with a combined premium of `328 and combined stop loss at `200. Combined premium targets are seen at `500 and `650
