FinNifty Bear Spread Strategy with Risk Reward Ratio of 1:1.62

FinNifty Bear Spread Strategy with Risk Reward Ratio of 1:1.62
Company:	Finnifty
Brokerage:	HDFC Sec
Date of report:	August 3, 2023
Type of Report:	Techno-Funda
Recommendation:	Sell
Upside Potential:	3%
Summary:	Technically, FinNifty has broken down from last three days of consolidation and formed a bear candle
Full Report:	Click here to download the file in pdf format
Tags:	Finnifty, HDFC Sec

We have seen long unwinding in the FinNifty Futures, where OI has fallen by 21% with FinNifty declining by 1.4% on Wednesday. Technically, FinNifty has broken broken down from last three days of consolidation and formed a bear candle. Price has moved below previous week’s low which is a negative development. In addition Index has closed below 21 Day EMA from now the 21 day EMA would act as resistance. We believe FinNifty is likely to trend lower in the coming week till 08th Aug 2023 expiry. We therefore recommend a Bear Spread strategy in FinNifty to profit from this view. Action to be taken Buy FinNifty 20100 Put @Rs 149.45 and Simultaneously Sell FinNifty (08 – Aug Expiry) (Approximate margin payable for the strategy Rs Rs 16050 (for exact margin, pls consult risk team email or check margin calculator Max Profit Rs 4942 Max loss Rs 3058 Breakeven point: 20023 Risk Reward Ratio: 1:1.62 Please note that the spread position may be exited early depending on the reading of the market Related