The index has witnessed some profit booking since the upward rally that commenced during the end of October series. However, FII’s have not changed their stance and thus continue to be long in index futures. Total number of long contracts now stands at 89,782 vs prev 85,449. On 21st December; 3,219 long contracts were liquidated compared to liquidation of 7,552 short contracts in index futures. The long/short has recovered from the lows of 12% that was witnessed during the beginning of November series to 67% now; highest since July 2023. On the index options front, the net callput is indicating significant unwinding of call writers; which is a bullish indicator. To conclude, the data is bullish from FII’s point of view now. Option data is indicating a bullish stance. Expect the index to move on the upside with 21,000 as a SL.
Weekly Expiry Point of View:
Option chain data for next weekly expiry is indicating a trading range of 21,000-22,000 zones. On the call side, 22,000 is the strike with highest OI. Majority of call writing was witnessed at this level; indicating resistance. On the put side, 21,000 is the strike with highest OI. As per the data, net call-put writing is indicating significant unwinding of call writers; which is a bullish indicator. Expect the expiry to be positive as long as 21,000 is sustained.
The sentiment on Nifty bullish. The strategy can be played out by selling 1 OTM PUT & selling 1 OTM CALL.
Nifty Theta Scalping Strategy:
SELL 1 LOT PUT NIFTY 28DEC2023 21,000 @ 34
SELL 1 LOT CALL NIFTY 28DEC2023 21,700 @ 33
Target – COMBINED PREMIUM OF 35 POINTS Stop Loss – COMBINED PREMIUM OF 80 POINTS