Derivative strategy on Nifty & Dr Reddy's Labs from Motilal Oswal Securities

Here are a few trading ideas from Motilal Oswal Securities

Nifty Outlook

The ongoing momentum is yet to witness exhaustion. The momentum indicator RSI is yet to register an overbought situation. A sustained move above 8450 could extend the up move while a breach below 8280 from hereon would stall the ongoing sequence & place nifty in a consolidation mode.

BEL

Reco: BUY

Last Close: 1274

Target : 1390

Positive sector outlook & Pennant formation within the broad oscillating range provides a good trading opportunity. Trading longs can be initiated with a stop at 1210 for a pattern target upto 1390.
 

DRREDDY JULY FUT.

Reco: SELL

Last Close: 3444
 
Target : 3250

Negative sector outlook & 'Dark Cloud Cover' formation indicates the termination of the ongoing pullback. DrReddy could be traded with a stop at 3520 & a trading target up to 3250.

DABUR JULY FUT.

Reco: SELL

Last Close: 310

Target : 293

‘Double Top’ formation on the daily scale coupled with an Impulse wave indicates shift in momentum. Pullbacks towards 313 would make the setup favorable for fresh shorts with a stop at 323.30 & a target up to 293.

OPTION STRATEGY

Nifty Call Butterfly Spread

Buy July 8400 CE 1 Lot

Sell July 8600 CE 2 Lot

Buy July 8800 CE 1 Lot

Target: 11300                                    SL: 3650

ü  Nifty is in long- long Unwinding cycle

ü  Option data suggest highest concentration in 8500 CE and 8000 PE

ü  Unwinding in OTM Calls in July series would augur directional move on higher side

ü  Considering stable volatility and positive outlook, Call Butterfly spread is recommended


Disclaimer: Motilal Oswal Securities ( MOSL ) is regulated by the Securities and Exchange Board of India ("SEBI") and is licensed to carry on the business of broking, depository services and related activities. MOSL is in the process of getting registered under SEBI - Research Analyst Regulations. MOSL, the spokesperson or his relatives, do not have financial interest in the securities mentioned above. The spokesperson has not served as a director, employee or officer at the subject company in the last 12 months. MOSL or its associate might be involved in market making for the subject company or have potential conflict of interest.

Sacchitanand Uttekar is an Equity Technical Analyst at Motilal Oswal Securities