Hello friends, I hope you all are doing good. In this Weekly Analysis with Option strategy post, I’m trying to share my view and analysis in Nifty and Banknifty for the coming weekly expiry.
This week we have witnessed a volatile session due to RBI Policy meet on Thursday. RBI kept the rate unchanged and the market is taking it as a negative sentiment. But still both the indexes manage to trade in a range only.
In the last 2-3 months we saw very high volatility in the market but from November onward market is trying to settle down which is a good sign for all the retail traders. Now, this is a good time for Option writers like us.
Keep your focus more on neutral strategies with limited risk. If you are keeping any position overnight, always keep it with a hedge, especially on the downside. Downside risk must be locked.
So always focus on Risk management. Your reward will come automatically.
Nifty weekly Analysis with Option strategy
If you look at the nifty chart, you can see that Nifty is trading in a 200 points band. This band is acting as a support and resistance for nifty. Whenever it touched the lower, it bounces back to the higher level.
If we talk about downside support, 11930 – 11900 is acting as an immediate support area. A breakdown is required to give some further levels.
Look at one more thing here. The band is pointing towards the upward direction which indicates that the overall trend is up. Nifty is making Higher highs and Higher lowers.
A breakdown from 11900 will lead to 11800. But till nifty is holding 11800, our strategy should be Buy-on-dips. Any dip should be treat as a buying opportunity and we should avoid any short position here.
Below 11800, a new short term sell signal will generate, then only we should look for a short trade in nifty. Till then buy-on-dips and enjoy.
Nifty Option Chain analysis
Based on option chain data, the highest Open interest stands at 12100 CE & 12000 PE, followed by 12000 CE & 11900 PE. PCR of all strikes is 0.78, which indicates a neutral market. PCR at 11900 stands at 4.79, which is acting as an immediate support level.
The Put-call ratio at 12100 stands at 0.23, which is acting as a resistance level. Equally, important indicator Option Pain is at 12000, indicating weekly expiry at 12000. A shift in option pain will provide further levels.
Significant open interest buildup on-call sides, Especially 12100 CE, 12050 CE & 12000 CE, which indicates that the market is facing some pressure on the higher side. Based on Option chain data, 11900, 11800 are good support levels & 12100 & 12200 are good resistance levels for this expiry.
Keep tracking open interest to analyze market participants’ behavior. If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
I have started a new Youtube channel where I’m posting daily analysis based on charts and Open Interest data in Hindi. Many people were saying that I should start something for those who are more comfortable in Hindi. So I started that youtube channel.
Nifty Weekly Option Strategy: Bull call ladder
If you find that Nifty gives a breakdown and sustaining below 11800, then square off 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 weekly analysis and option strategy post I shared that 31800 is acting as a strong support level for Banknifty. This week Banknifty broke that level and heading towards lower levels.
31500 is acting as immediate support here if bank nifty break this level then 31000 should be the next support. A breakdown from 31000 will generate a sell signal.
So a new short position should be below 31000 only. Till then our strategy should be Buy-on-dips. Do not take any discission in hurry.
Bank Nifty option chain analysis
Based on option chain data, the highest Open interest stands at 32000 CE & 31000 PE, followed by 32500 CE & 31500 PE. PCR of all strikes is 0.57, which indicates an oversold market. PCR at 31000 stands at 10, which is acting as an immediate support level.
The Put-call ratio at 32000 stands at 0.08, which is acting as a resistance level. Equally, important indicator Option Pain is at 31500, indicating weekly expiry at 31500. A shift in option pain will provide further levels.
If you don’t know how to analyze open interest. Just enrol for our Option Strategies – A Mentorship Program.
Bank Nifty Weekly Option Strategy: Bull call ladder
If you find that Nifty gives a breakdown and sustaining below 31000, then square off 31600 CE & 31800 CE in profit, and short 31200 CE and convert it into a bear call spread.
To learn the advanced adjustments, you can enroll to our Option Strategies – A Mentorship Program
Much Check this also- Modified Condor Option Strategy in VEDL, 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.