Nifty trading strategy: Apply Bull Call Spread as index remains in uptrend

Nifty F&O strategy: Analysts say short-term dips in Nifty should be viewed as buying opportunities within this broader uptrend

Nifty Trading Strategy

  Strategy: Nifty Bull Call Spread

Expiry: 5 JUN 2025

Strikes: Buy 25,000 CE and Sell 25,500 CE

Net Outflow: ~100

Stop Loss: 50

Strategy Target: 200

 

Rationale:

 

• The Nifty index has structurally resumed its upward trajectory after forming a likely swing low at 24,462 on May 22.

• The trend remains positive as long as the swing low at 24,462 is intact. Short-term dips should be viewed as buying opportunities within this broader uptrend.

• Healthy market breadth suggests a potential resurgence in broader market momentum, with an upside target of 25,500 in the near term.

• In light of prevailing volatility, a Bull Call Spread is recommended for capturing a moderate upside move with a favorable reward-to-risk profile.

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Disclaimer: Sahaj Agrawal is senior vice president, head of derivatives research at Kotak Securities. Views expressed are his own.