Nifty weekly expiry today: Kotak suggests trading strategy, top picks; Check key levels to watch

Indian equity benchmark indices settled lower on Monday, with Nifty falling nearly 80 points and slipping BELow 24,300 mark. The Nifty has remained volatile lately, falling nearly a per cent in the last one week, while turning flat in the last one month. The market range has remained narrow, instead of highlighting a trend reversal.

Following last week's negative reversal from the 24,774 high, Nifty has entered a consolidation phase within its broader uptrend. It has retraced more than 38.2 per cent of the 23,606–24,774 rally, with the correction unfolding over the past 10 trading sessions. The gradual nature of the decline, despite the broader uptrend remaining intact, indicates a healthy pullback, said Sahaj Agrawal, Head of Derivatives Research at Kotak Securities.

For Today's expiry, immediate support is placed in the 24,150–24,050 zone, while resistance is seen at 24,360, followed by 24,450. As long as the index sustains above the 24,050 support zone, the broader structure is likely to remain constructive. A sustained move above 24,450, however, could signal a resumption of the uptrend, said Agrawal.

To recall, the Nifty50 settled at 24,287.65, falling 78.35 points, or 0.32 per cent, on Monday. The Nifty Bank, however, added only 6.70 points, or 0.02 per cent, to end the session at 57,497.80, while the volatility gauge, India VIX, inched up marginally to 11.32 levels, but has eased nearly 8 per cent in a week.

In the derivatives space, open interest remains heavily concentrated at the 24,500 call and 24,300 put strikes, reinforcing a well-defined trading range ahead of expiry, said Kotak's Agrawal. "Overall, the combined technical and derivatives data suggests an effective range of 24,100–24,450 for tomorrow's expiry, with both extremes likely to hold on a closing basis."

"With the probability of a sharp directional move appearing limited on either side, the prevailing setup favours a short strangle using far OTM options, allowing traders to benefit from Theta decay during the final session, provided the index remains within the anticipated range," he said

Agrawal advocated a short strangle as he suggest to sell a 24,500 call option and selling a 24,150 put option in Nifty, with expiry of August 18, which will result in an inflow of Rs 16.55. Stop Loss at Rs 33, while one can expect entire premium as the target for this strategy. Traders eyeing stock-specific action, may buy Bharat Electronics Ltd (BEL) futures of August at Rs 413 with a target price of Rs 435 and a stop loss at Rs 399, he said.