'Bull Call Spread' is your go-to strategy for Nifty50 today; here's why

A breakout above 23,350 could fuel further upside towards the 23,700-23,800 range, said analyst at Kotak Securities

Suggested Strategy:

 

Strategy: Nifty Bull Call Spread

  Expiry: 9 APR 2025

  Strikes: Buy 23400CE and Sell 23700CE

  Net Outflow: 67

  Stop Loss: 30 

Strategy Target: 200  ALSO READ | Trading Strategy: Here's how to trade Nifty Bank on Friday, April 4

 

Rationale:

 

-- The recent selling pressure from ~23,870 highs has stabilised around 23,100-23,140, which aligns with the 38.2 per cent Fibonacci retracement of the rally from 21,965 to 23,870.

  -- Despite short-term volatility, the overall market structure remains constructive, with the pullback appearing as a healthy retracement within the ongoing bullish trend.

 

  -- A breakout above 23,350 could fuel further upside towards the 23,700-23,800 range.

  -- Midcap100 is signalling renewed bullish confidence. 

-- A Bull Call Spread is recommended to capitalize on the expected recovery while ensuring a well-defined risk-reward structure.  ALSO READ | Union Bk, Jubilant FoodWorks must have stocks for your portfolio. Check why 

 

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