The Nifty index reached a new peak of 24,661 on Tuesday, breaking out of its recent trading range. Analysts observe a bullish trend with consistent upward movement, supported by strong buying interest.
Chandan Taparia, Senior VP of Equity Derivatives & Technicals at Motilal Oswal, noted that Nifty is maintaining its upward momentum above the 24,200 level. He expects further gains towards 24,750 and potentially 25,000.
Despite a slight increase in volatility, indicated by India VIX rising from 14.11 to 14.22, it remains relatively low. This stability supports bullish sentiments and encourages investors to add momentum.
Based on option data, the trading range is anticipated between 24,200 and 25,000, with immediate levels from 24,400 to 24,800.
Taparia suggests a bullish options strategy known as the Bull Call Spread, ideal for capturing gains when expecting a moderate rise in the underlying asset’s price. This strategy helps mitigate risks associated with time decay (theta), providing a structured approach to benefit from the current market stance.
Understanding Bull Call Spread
A Bull Call Spread involves using two call options to capitalize on an expected increase in the asset’s price. It allows traders to profit from upward movements while managing potential losses.
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