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The Nifty Index opened flattish on Tuesday but bears were in full control right from the beginning of the session. The selling intensity increased in the second half and the index broke 24,450 zones. It formed a bearish candle on a daily frame and closed below 24,500 zones with losses of around 310 points.
“Now, till it (the index) holds below 24,500 zones, weakness could be seen towards 24,350 and then 24,200 zones, whereas hurdles are placed at 24,750 and then 24,850 zones,” said Chandan Taparia , Senior VP, Equity Derivatives & Technicals, Wealth Management at Motilal Oswal. On the option front, the maximum Call OI is at 25,000 then 25,200 strike while the maximum Put OI is at 24,000 then 23,500 strike. Call writing is seen at 24,600 then 24,700 strike while Put writing is seen at 24,400 then 24,300 strike.
“Option data suggests a broader trading range between 24,000 to 25,000 zones and an immediate range between 24,300 to 24,700 levels,” Taparia added. Stock Trading A2Z of Stock Market for Beginners: Stock Market Course For Beginners By - elearnmarkets, Financial Education by StockEdge View Program Stock Trading Introduction to Technical Analysis & Candlestick Theory By - Dinesh Nagpal, Full Time Trader, Ichimoku & Trading Psychology Expert View Program Stock Trading Stock Investing Made Easy: Beginner's Stock Market Investment Course By - elearnmarkets, Financial Education by StockEdge View Program Stock Trading Point & Figure Chart Mastery: A Comprehensive Trading Guide By - Mukta Dhamankar, Full Time Trader, 15 Years Experience, Instructor View Program Stock Trading Cryptocurrency Made Easy: Cryptocurrency Course By - elearnmarkets, Financial Education by StockEdge View Program Stock Trading Market 104: Options Trading: Kickstart Your F&O Adventure By - Saketh R, Founder- QuickAlpha, Full Time Options Trader View Program Stock Trading Renko Chart Patterns Made Easy By - Kaushik Akiwatkar, Derivative Trader and Investor View Program Stock Trading RSI Trading Techniques: Mastering the RSI Indicator By - Dinesh Nagpal, Full Time Trader, Ichimoku & Trading Psychology Expert View Program Stock Trading Derivative Analytics Made Easy By - Vivek Bajaj, Co Founder- Stockedge and Elearnmarkets View Program Stock Trading Technical Analysis Made Easy: Online Certification Course By - Souradeep Dey, Equity and Commodity Trader, Trainer View Program Stock Trading Technical Trading Made Easy: Online Certification Course By - Souradeep Dey, Equity and Commodity Trader, Trainer View Program Stock Trading Ichimoku Trading Unlocked: Expert Analysis and Strategy By - Dinesh Nagpal, Full Time Trader, Ichimoku & Trading Psychology Expert View Program Stock Trading Commodity Markets Made Easy: Commodity Trading Course By - elearnmarkets, Financial Education by StockEdge View Program Stock Trading Options Trading Course For Beginners By - Chetan Panchamia, Options Trader View Program Stock Trading Options Scalping Made Easy By - Sivakumar Jayachandran, Ace Scalper View Program Stock Trading Market 103: Mastering Trends with RMI and Techno-Funda Insights By - Rohit Srivastava, Founder- Indiacharts.com View Program Stock Trading Technical Analysis for Everyone - Technical Analysis Course By - Abhijit Paul, Technical Research Head, Fund Manager- ICICI Securities View Program Chandan Taparia believes that one can ride the negative stance and expect that any small bounce could be sold for a downside move towards 24,300-24,200 zones.
One can initiate a Bear Put Spread strategy to benefit from the bearish stance along with market volatility . Bear Put Spread Traders use this strategy when they expect the price of an underlying to decline in the near future. This involves buying and selling put options of the same expiry but different strike prices.
A higher strike price put is bought and a lower-priced one is sold. The higher-priced put is in-the-money (ITM) while a lower-priced one is an out-of-the-money option. This strategy results in a net debit for the trader as the cost of the ITM put gets adjusted with the cash flow from shorting the OTM put.
ETMarkets.com (Prices as of October 22) Below is the payoff graph of the strategy: ETMarkets.com (Source: Motilal Oswal) ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own.
These do not represent the views of Economic Times) (You can now subscribe to our ETMarkets WhatsApp channel ).
