Bank Nifty has been trading sideways to positive around 49,800-49,900 levels on June 11, near its upside resistance zone. According to experts, any sustainable move above 50,000 will likely give momentum to the index to resume an upside rally.
Akshay Bhagwat, Vice President of Derivative Research at JM Financial, has a positive view on Bank Nifty with an expected expiry zone of Rs 50,200-50,300. "For the June 11 expiry, Bank Nifty has high open interest set at 49,000 PE and 51,000 CE. The first hurdle is to overcome 50,000, after which momentum will gain in Bank Nifty," said Bhagwat.
Bhagwat recommends a ratio call spread strategy, which benefits from a moderately bullish view, with no risk if the index falls. However, the strategy may make a loss if the index rises above a threshold.
Bank Nifty June 12 Expiry: Ratio Call Strategy
- Buy 1 lot 50,000 CE (call option) @ Rs 140
- Sell 2 lots 50,200 CE @ Rs 80
- Max profit: Rs 2,550, when the index is at 50,250
- No downside risk: Profit of Rs 300 if Bank Nifty expires below 50,000
- Risk / Stop Loss above 50,450 (Spot): Loss increases Bank Nifty rises above 50,450.
The Bank Nifty index is trading near all-time high levels and has given a consolidation breakout on the daily charts.
Arun Kumar Mantri, Founder of Mantri Finmart, finds the index components strong and expects it to surpass 50,000 on the daily charts during the current expiry. "The technical indicators are also exhibiting bullish signs, and the positive momentum is likely to continue in the coming sessions as per the recent price and volume action," he said.
Arun Mantri recommends a different expiry strategy:
- Buy 1 lot of Bank Nifty 12 June 49,800 CE (call option) at Rs 205-210
- Sell 1 lot of Bank Nifty 12 June 50,300 CE at Rs 55-60
- Break-even point: 49,955
- Max loss per lot: Rs 2,325
- Max profit per lot: Rs 5,175
- Risk-reward ratio: Higher than 1:2
These strategies reflect a moderately bullish outlook on Bank Nifty with specific levels to watch for potential profit and risk management.
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