Hello guys. How are you? Hope you are doing good in your trading. In my Weekly post, I’m sharing weekly analysis and Nifty and Banknifty weekly Option strategy for the coming week.
In this weekly post, I’m trying to share whatever I have learnt till now. After spending 8 years in trading here, I understand one thing. Your trading psychology plays a very important role in your successful trading.
Your strategy, Your risk management, your position sizing, your discipline in trading etc.., all these things plays an important role. But how you behave in a particular situation that’s the major thing.
So instead of just taking random trades, we have to follow the market. We need to understand first “How market behaves?” At least give some time to understand the market movement. If you understand market behaviour, your profitability will increase a lot.
See, Every person has a different mindset and a different comfort level. Whatever you are doing, might not be good me and whatever I’m doing, might not generate the same results for you. So try to figure out your comfort level first and create a strategy based on that level only.
Do some research on yourself, learn the basics, try to understand market behaviour and then implement these things in your trading strategy. Once you implement all these things in your trading plan, you will realise that now you are on the right path. You will gain confidence and can take better decisions.
In the share market, Money is not coming from what trade you took? The money will only come based on “How you manage that trade?” So focus more on your trade management. It will help to make a better decision in a non-expected situation.
So instead of just gambling, try to make a proper trading plan first and trade like a professional is trading. Again I’m saying learn the basics first.
Nifty Weekly Analysis with Option Strategy
In the last weekly option strategies post, I shared that, 12000 – 12100 is acting as a strong resistance zone. You can see on the chart that nifty is consolidating near to this range.
Right now there is no buy or sell signal is coming on chart. A breakout from 12100 will generate a fresh buy signal and a breakdown from 11700 will give us a new short signal.
The overall trend is looking good and there is no sign of weakness. Now we have a range of 12100 – 11700, which is giving us a range-bound activity in nifty until we will not get a breakdown or breakout.
For those who are holding a long trade in nifty can keep holding with a stop loss below 11700. New short or a new long is not advisable at the current price.
Nifty Option Chain analysis
Based on option chain data, the highest Open interest stands at 12000 CE & 11800 PE, followed by 11900 CE & 11900 PE. PCR of all strikes is 1.09, which indicates a neutral market. PCR at 11800 stands at 2.95, which is acting as an immediate support level.
The Put-call ratio at 12000 stands at 0.32, which is acting as a resistance level. Equally, important indicator Option Pain is at 11900, indicating weekly expiry at 11900. A shift in option pain will provide further levels.
Significant open interest buildup on both sides, Especially 11800 PE, 11900 PE & 12000 CE, which indicates that the market is trying to take some bullish movement in this expiry. Based on Option chain data, 11800, 11900 are good support levels & 12000, 12100 are good resistance levels for this expiry.
Here we should also look at 12500 CE where we can see around 10 lakh open interest buildup. This also indicates a good level to follow for this week. Keep tracking this level. Here I’m not saying that go and just buy 12500 Call option. I’m saying just to keep this level in mind too.
Keep tracking open interest to analyze market participants’ behaviour. If you don’t know how to analyze open interest. Just enrol for our Option Strategies – A Mentorship Program.
Nifty Weekly Option Strategy: Modified butterfly
This week I have created a directional strategy because I’m slightly bullish in Nifty.
If you find that Nifty gives a breakdown and sustaining below 11800, then square off 12150 CE, 12100 CE & 12000 CE in profit, and short 11800 CE and convert it into a bear call spread.
Banknifty Weekly analysis with option strategy
In the last banknifty weekly option strategy post, I shared that overall trend is UP in banknifty and there is no sign of weakness. The same we saw this week.
Banknifty gave a good breakout from 30700 and mage to sustain above that level. Now 31500 – 31800 is acting as a very strong resistance zone. A breakout from this level will lead to higher levels.
On the downside, 30700 and then 30500 will act as strong support zones. Below 30500 we can test 29800 again. SO at this time no fresh BUY or SELL trade advisable. Let’s wait for a breakout or breakdown to initiate a fresh trade.
Those holding longs can hold with a stop loss of 30500. Now 30700 – 31700 seems like a range for a range-bound activity in BankNifty. BEtter trade with a range-bound strategy until we are not getting any breakout or breakdown.
Bank Nifty option chain analysis
Based on option chain data, the highest Open interest stands at 31500 CE & 30500 PE, followed by 32000 CE & 30000 PE. PCR of all strikes is 1.02, which indicates a neutral market. PCR at 30500 stands at 8.35, which is acting as an immediate support level.
The Put-call ratio at 31500 stands at 0.02, which is acting as a resistance level. Equally, important indicator Option Pain is at 31000, indicating weekly expiry at 31000. A shift in option pain will provide further levels.
Open Interest analysis is very important. It will tell you where market participants are betting actually.
If you don’t know how to analyze open interest. Just enrol for our Option Strategies – A Mentorship Program.
BankNifty Weekly Option Strategy: Modified butterfly
Possible adjustments: No adjustment required. You can keep a stop loss at 31350 & 30650 for this banknifty strategy
To learn the advanced adjustments, you can enrol to our Option Strategies – A Mentorship Program
Much Check this also- Bull Call Ladder in ZEEL, Iron Condor in SBIN, Weekly Analysis & Option Strategies For 10th Oct Exp, Why People Lose Money & Nifty and Bank nifty index analysis with Option Strategy
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DISCLAIMER: – we are not a SEBI research analyst. Views 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.