Indian benchmark indices have recently experienced a significant shift in market sentiment, moving from negative to a broadly positive outlook for the ongoing June Series. This reversal is largely attributed to the US-Iran trade deal, which has led to a reduction in crude oil prices and a recovery in the Indian rupee, subsequently easing inflationary concerns.
Nifty's Technical Breakout and Bullish Undertone
According to Sahaj Agrawal, Head of Derivatives Research at Kotak Securities, signs of strengthening momentum emerged as the Nifty successfully closed above its 23,070–23,425 consolidation band. A critical technical development was the breakout above a declining resistance trend-line, previously positioned near 23,700, connecting recent swing highs of 24,480 and 24,090.
A strong gap-up opening, fueled by optimism surrounding the US-Iran peace talks, decisively cleared this key supply zone, reinforcing a bullish undertone in the market. From a derivatives perspective, analysts note a rise in the long ratio from 8 percent to 12 percent. On the options front, significant Open Interest (OI) build-up is observed at the 23,800 Put and 24,000 Call strikes. However, the 24,100–24,300 zone is identified as an immediate hurdle that may trigger some consolidation or profit booking.
Expiry Day Trading Strategies from Kotak Securities
For traders navigating the June expiry, Agrawal has suggested three distinct strategies, tailored to varying capital management and risk appetites:
- Momentum Trade: Traders may consider a conditional buy on the 24,000 Call option if the Nifty50 spot levels sustain above 24,010.
- Buy on Dips: This strategy involves buying the 23,800 Call option in the range of Rs 60-70, targeting Rs 125 and Rs 150. A strict stop loss should be maintained at Rs 35.
- Short Strangle: For the June 16 expiry, this involves selling the 23,600 Put option and selling the 24,300 Call option. The expected inflow is Rs 19, with a stop loss set at Rs 38 and a target of capturing the entire premium.
Despite recent selling by Foreign Institutional Investors (FIIs) in the cash segment, which saw an exodus hitting Rs 62,850 crore in the first half of June, Agrawal believes the broader market setup remains constructive. Buying on dips and participating in momentum-based breakouts continue to be the preferred trading approaches. Sustained trading above 24,010 is expected to trigger a fresh breakout, while any corrective move towards the 23,700 zone is viewed as an opportunity to accumulate long positions. Additionally, an oversold RSI setup during intraday declines could offer attractive risk-reward entry points.
Disclaimer: Trading in the equity Futures & Options (F&O) segment carries substantial risk. A study published by SEBI indicates that over 93% of individual retail traders in this segment incur net financial losses. Readers are strongly advised to conduct their own thorough research and consult with a qualified financial advisor before making any investment decisions.