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Technical & Derivatives Outlook

* Nifty index started August on a positive note and witnessed buying in the first week of the month and it went on to cross 24750 zones. The index faced some resistance at elevated levels as profit booking emerged thereafter and slowly dragged the index towards 24000 zones in the latter part of the month. It witnessed sharp swings on either sides amidst indecisive movement but kept the overall trend sideways to negative. The index managed to recover from the lower levels towards the end of the month but failed to extend the momentum.

* Technically, Nifty formed a bearish candle on the monthly frame indicating cautious sentiment. The index faced resistance at higher levels and kept the overall trend sideways to negative. For September, positional supports are seen at 23000 then 22800 zones, while on the upside hurdles are placed at 23900 then 24200 zones

Derivative Strategy

Bank Nifty

• Bank Nifty index has witnessed a breakdown below its five-week consolidation range, which suggests that upside seems to be capped.

• On the daily scale, the index has slipped below its 200 DEMA, suggesting weakness in the immediate trend, but multiple supports are intact at lower levels.

• On the derivatives front, Maximum Call OI is placed at the 57000 strike while Maximum Put OI is concentrated at the 56000 strike, indicating a wider trading band for the coming sessions.

• Looking at the overall structure, volatility is likely to remain elevated within a broader range, and thus we recommend an Iron Butterfly Spread to capitalize on the benefit of time decay in the ongoing series.

Sell 1 lot of 56500 Call

Sell 1 lot of 56500 Put

Buy 1 lot of 57700 Call

Buy 1 lot of 55300 Put

Margin Required: Rs.1,30,000 Net

Premium Received: 855 Points (Rs. 25,650)

Max Risk: 345 Points (Rs. 10,350)

Max Profit: 855 Points (Rs.25,650)

Lot size: 30 Profit if it remains in between 55650 to 57350 zones

Nifty

• August series witnessed volatile swings within a broader range, with selling pressure emerging consistently at higher levels and limited buying interest at lower levels, indicating a bearish bias.

• The index has been trading in a broad 23500–24000 range over the last few weeks while forming lower highs on the weekly chart for the past 5 weeks, reflecting weakness at higher levels.

• On the derivatives front, Maximum Call OI is placed at the 24000 strike, while Maximum Put OI is concentrated at the 23000 strike. Strong Call writing at higher strikes, coupled with comparatively weaker Put writing, indicates a sell-on-highs setup and resistance around higher levels.

• With the index forming lower highs and facing sustained selling pressure at elevated levels, a bearish move is expected. An Iron Butterfly Spread is suggested to capitalize on the expected range-bound movement with a bearish bias.

SELL 1 LOT OF 23500 CALL

SELL 1 LOT OF 23500 PUT

BUY 1 LOT OF 24000 CALL

BUY 1 LOT OF 23000 PUT

Margin Required : Rs.1,50,000 Net

Premium Paid : 160 Points

Max Risk : 160 Points (Rs.10400) Max Profit: 340 Points ( Rs.22100)

Lot size : 65 Profit if it remains in between 23170 to 23840 zones

Commodities & Currency Outlook

* Early August opened on de-escalation hopes briefly as officials signaled the possibility of a deal to reopen Hormuz traffic, even as actual transits stayed near a standstill

* Iran worked with Oman on a potential Hormuz arrangement but refused to reopen the strait without US concessions, sanctions relief and war reparations

* June MOU's 60-day window lapsed Aug. 17 with no durable deal as the US declined to extend it & Iran responded by shifting to a more offensive military posture

* Renewed US-Iran strikes on Aug. 30–31 ended the six-week calm, with US strikes on Larak Island, threats against Kharg Island and Iranian retaliation in the UAE and Jordan added fresh supply risk

* Tanker rates have surged to war-high levels, particularly on Middle East–China and Middle East–Singapore routes

* Pricing has shifted from “gradual reopening” to “prolonged disruption,” with cautious tanker movements and rerouting pointing to expectations of sustained disruption rather than a phased normalization

* UAE and Saudi Arabia expanding bypass capacity and growing shadow-fleet activity remains a headwind, but neither can offset Hormuz disruption in the near term

* The month shifted from de-escalation hopes to renewed escalation, with the failed MOU and fresh Gulf attacks posing greater risk this time as market buffers have largely eroded

* Hormuz remains the key upside risk for crude; while a temporary ceasefire could ease prices, but without a verified reopening, the geopolitical premium remains embedded

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