Hello folks! Hope you are safe and healthy. Every week, I’m sharing this weekly article to analyse what is the nifty and bank nifty trend today with weekly options strategies for both the indices.
Every week I’m sharing some important tips too that can help you to be a more mature trader. If you are new and not following my blog, you should look at the previous articles too.
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Many times I have shared in my previous articles that
Successful trading is not just placing the right trade. Successful trading is all about Trade Management.
Why I’m saying that? Because we are living in a world that is changing every day. Whatever we are analyzing today will not valid for tomorrow. Tomorrow will bring a new picture for us. So we are unable to convert our position based on further analysis, it will be difficult for us to generate some consistent return from this market.
Let’s say; you have taken a long trade in bank Nifty today because you saw that trend is Bank nifty trend today is UP. What will you do if tomorrow’s direction has changed? How will you manage your trade? What adjustments will you make in your position to convert the sentiment of your trade?
These are the questions you should keep in mind before entre in a trade. Proper trade management is the key to success in this market.
That’s is the main reason. I have started with option strategies. These strategies are giving us the freedom to manage our trade more efficiently. If we have taken a bullish trade, we can change the direction to bearish with just a few adjustments. And the best part is, no need to make any decision in a hurry. You can wait if you find there is a breakout or breakdown from a critical level.
As you know, 80% of breakouts are false breakouts. If you find a breakout from your breakevens, you can wait for the confirmation that it’s a valid breakout of the false one Because your position is hedged. You don’t need to bother about any global or domestic news that can trigger a fresh buying or selling in the market tomorrow.
You know how much is the max loss in this position. Now you will find yourself in a better place to make some right decisions because your decisions are free from emotions. Now, if you think this is the correct way to trade and wanted to learn how to trade and adjust, these option strategies can join our Mentorship program. Click the below button for more details.
Nifty trend today with option strategies
Based on the chart, We can see that Nifty is making higher highs and higher lows that indicates it is in UP Trend. As I have shared in my last weekly article, that 11400 – 11500 is the strong resistance zone and Nifty needs to break that level to go higher.
Based on the fibonacci retracement tool, its a 78.6% retracement level too and that’s the reason you can see Nifty is facing resistance here.
On the Downside, 11100 – 10850 is the strong support zone from the coming week, A breakdown will lead to some lower levels till 10500.
Here 10500 is the psychological level, which will decide the further trend for medium to long term. Based on the chart, we can say that 11000 – 11500 is the range for coming week. Keep tracking for further updates.
Nifty trend today based on the option chain analysis
Based on option chain data, the highest Open interest stands at 11500 CE & 11000 PE, followed by 11400 CE & 11200 PE. PCR of all strikes is 1.27, which indicates a slightly overbought market. PCR at 11000 stands at 4.88, which is acting as an immediate support level.
The Put-call ratio at 11500 stands at 0.22, which is acting as a resistance level. Equally, important indicator Option Pain is at 11300, indicating weekly expiry at 11300. A shift in option pain will provide further levels of expiry. So keep tracking max pain.
Significant open interest buildup on both sides. Indicating that Nifty is facing good support from both the side and expecting to be in a range only. So based on the OI, the possible range for this week should be 11100 – 11500.
Keep tracking change in open interest to analyze market participant’s behavior, so that you can adjust your position accordingly. If you don’t know how to analyze open interest fo find nifty and Bank Nifty trend today for option selling strategies. Just enroll for our Option Strategies – A Mentorship Program.
Nifty option Strategy: Iron Condor
Initially, you can keep a stop loss of 11200 & 11600 for this strategy. Means square off if you find nifty is giving a breakout or breakdown. Or you can do this adjustment too. ( Do not hold this strategy is loss is more than 2000₹).
If you find that Nifty is giving a breakdown and sustaining below 11200, then square off call spread and bring it down to 300 points lower levels.
The same thing you can do with put spread means if you got a breakout from 11600. You can shift your put spread to 300 points up.
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Bank Nifty trend today with option hedging strategies
If you look at the chart, you can seen clearly that Bank nifty is trading a tight range of 23200 -21000. A breakout or breakdown required for further levels.
Based the Fibonacci Retracement tool. 23000 is the 38.2% level which is very crucial for the further upside levels. A successful breakout will give us a good opportunity to go long for a target of 50% level i.e 24500 on the UPside. Here 22500 – 23000 is acting as a strong resistance zone which need to break for further upside levels.
although the trend is UP but on the downside, 21000 is acting as a strong support level here. A breakdown will give us a new sell signal in Banknifty. So If you are holding a long trade, keep your risk management on the higher side.
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Bank Nifty trend today based on the option chain analysis
Based on Bank nifty option chain data, the highest Open interest stands at 22500 CE & 220000 PE, followed by 23000 CE & 20000 PE. PCR of all strikes is 0.91, which indicates a neutral market. PCR at 21500 stands at 4.61, which is acting as an immediate support level.
The Put-call ratio at 22500 stands at 0.24, which is acting as a resistance level. Equally, important indicator Option Pain is at 22200, indicating weekly expiry at 22200. A shift in option pain will provide further levels.
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Bank Nifty weekly expiry Strategy: Iron Condor
If you find that BankNifty gives a breakdown and sustaining below 21700, then Shift your Call spread to 1000 points down.
The same thing you can do with put spread means if you got a breakout from 22750. You can shift your put spread to 1000 points up.
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Post your comments in the comment box if you have a query related to the Nifty and Bank Nifty trend today with option strategies. You can ask any question related to option trading in the comment box.
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*( Please avoid any question like which Call or Put we should buy in the coming week).
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DISCLAIMER: – we are not a SEBI research analyst. Views or the nifty and bank nifty trend today plus the option strategies posted here only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline to interpreting specified analysis methods. This information should only be used by investors and traders who are aware of the risk inherent in securities trading.