How to trade amid volatility? Here's one strategy to capture any recovery

Nifty staged a sharp rebound post Monday's gap-down, with the multi-support zone at 21,800-21,700

1 min read Last Updated : Apr 08 2025 | 7:34 AM IST

Suggested Strategy:

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Rationale:

Nifty staged a sharp rebound post Monday’s gap-down, with the multi-support zone at 21,800–21,700 (Mar–May 2024 lows) holding steady.
The open nearly coincided with the day’s low at 21,743, while the close near the upper end of the daily candle adds significance.
Micro-structure charts indicate a potential Double Bottom, with 21,800 tested twice intraday, separated by a valley peak at 22,190.
Sustaining above 22,200 could fuel a short-covering rally towards the gap zone near 22,800.
With volatility spiking, a Bull Call Spread is recommended to capture the anticipated recovery while maintaining a defined risk-reward framework.

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(Disclaimer: Sahaj Agrawal is a senior vice president and head of derivatives research at Kotak Securities.)