Deploy Protective Put strategy on Nifty in the April F&O expiry week: Kunal Shah

In an interview with ETMarkets, Shah said: “The undertone remains bullish and if Nifty50 sustains above 17,500 the up move will again resume towards 18000-18200 levels,” Edited excerpts:

A volatile week for Indian markets but bears remained in control. What led to the price action?
The index after a sharp rally from 16,800 to 17,800 witnessed some profit booking at higher levels. The undertone remains bullish and if Nifty50 sustains above 17,500 the up move will again resume towards 18000-18200 levels.

As we enter the last week of April – F&O expiry will keep the markets volatile. Where do you see markets moving in the coming week? It did breach 200-DMA on Friday – what are the levels which one should watch out for next week?

A lot will depend over the weekend since we have two heavyweights coming out with results i.e Reliance Industries and ICICI Bank.

The expiry week is likely to be volatile and the Monday trend will give a clear confirmation of where the market is likely to move. The range is 17500-17800 and a break on either side will have a decisive move.

Q) Is there any strategy that one can deploy in the expiry week?
A) One can deploy a Protective put strategy on Nifty.
BUY 1 LOT OF NIFTY FUT AND BUY 1 LOT OF NIFTY 17600PE AROUND 100.
BREAKEVEN: 17700
STOP LOSS: 30
TGT- 220/300.

IT index fell the most thanks to weak results from Infosys, TCS and HCL Tech. How should investors play the IT themes?
IT stocks should be avoided at the current levels as the index is trading in a downtrend on the monthly chart.

A pullback rally should be utilized to exit or initiate fresh short positions. The undertone remains weak and can be an underperformer for the year 2023.

Small & Midcaps marginally outperformed benchmark indices in the week gone by – what led to the price action?
The mid-cap and the small-cap index outperformed the main indices and now are trading at the major make-or-break level. The Nifty midcap index faces resistance at 31,500 and if sustains below this level, it will lead to some profit booking.

The index, if it manages to break above 31,500, will lead to further bullish momentum towards 32,000-32,200 levels.

Any stocks which look attractive on the chart for a medium to long-term time frame and why?

Here is a list of top trading ideas –

IDFC Ltd: Buy| Stop Loss Rs 78| Target Rs 87-90
IDFC LTD on the weekly chart has formed a strong bullish engulfing candle which is a bullish reversal pattern. The stock on the lower time frame has been trading in a strong uptrend with higher high and higher low formations intact.

The momentum indicator RSI has also given a positive crossover which confirms the buy signal. The lower-end support is visible at the 80-78 zone which will act as a cushion for the bulls and the potential upside targets are 87/90.
Apollo Tyre: Buy on Dip| Stop Loss Rs 320| Target Rs 345-352
Apollo Tyres has witnessed a strong outperformance throughout the week with strong trading in a strong uptrend. The dips in the stocks have been bought aggressively which confirms the buyer’s strong interest.

The stock remains in a buy-on-dip mode with support visible at the 320 level and the potential upside targets are Rs 345-352.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of Economic Times)