Weekly Analysis & Options Strategy For 6th Sep – 13th Sep 2019

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Hello friend, hope you are good. I hope our weekly analysis & options strategy post is providing some value to you. I’m trying to make it more valuable so please share your feedback or suggestions in the comment box.

This week index manages to trade in a range only. The same range we discuss in our last weekly analysis & options strategy post. Sentiments are still weak in the market but look like nifty is trying to take some support from these levels.

Last week, Finance minister announced banks merger. This will give some positive impact to our banks but in the long term. There are still lots of short terms uncertainties are there like GDP numbers, August Sales numbers by automakers, weak manufacturing output growth numbers etc. The PMI index was 51.4 for August, slowest for the last 15 months. 

Selling by FIIs is also a major reason for this weakness. In the last 2 months (July & August) FIIs sold almost 30000 cr in Equity Market.

Let us look at the charts:

Nifty Chart this week:

Nifty Weekly Analysis

Last week I shared that, based on Fibonacci levels 50% – 61.8% retracement zone (10800 – 11150) mostly acting as a strong reversal zone. The same thing we can see this time too.

Although sentiments are weak but nifty manage to hold this level. So new long or short trade should be only after a breakdown or a breakout from this zone.

We can see a positive divergence on RSI & MACD too but it will valid only if we got a breakout from 11150 with good volumes.

So until nifty is trading between this range of 10800-11200, trade with nondirectional strategies only.

Open Interest analysis

Based on option chain data, the highest Open interest stands at 11000 CE & 10800 PE, followed by 10900 CE & 10900 PE. PCR of all strikes is 0.91, which indicates a neutral market. PCR at 10800 stands at 3.26, which is acting as an immediate support level, PCR at 11000 stands at 0.17, which is acting as a resistance level. Equally, important indicator Option Pain is at 10900, indicating weekly expiry at 10900. A shift in option pain will provide further levels.

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Nifty Options Strategy: Butterfly

Nifty-Option-Strategy

Adjustments not required for this strategy. Just book loss and close this strategy once it breaches break-even points. If you still want to make some adjustments, just shift Call spread to 100 points down after a breakdown from 10765. Keep put spread as it is. Same thing you can do with put spread after a successful breakout from 11035.

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Banknifty chart this week:

Bank Nifty weekly analysis

Banknifty is trading near to its crucial support zone. Trying to take some support from lower levels. On downside 26600 is very important in terms of some recovery.

A breakdown from 26600 will lead to more downside levels. On upside 28000 is a strong resistance. A breakout from 28000 will give a long signal. Till then sell on the rise should be our strategy.

Personally, I’m expecting some rangebound activity here for some more time. 27000 – 28000 is the range we should keep on the radar to initiate a strategy.

BankNifty Open Interest Analysis:

Based on option chain data, the highest open interest stands at 27500 CE & 27000 PE followed by 28000 CE & 26500 PE. PCR of all strikes stands at 0.86, which is a neutral zone. PCR at 26000 stands at 4.45, which is acting an immediate support zone. PCR at 27200 stands at 0.46, which is acting as an immediate resistance zone. Option pain stands at 27100, giving us expiry level. Keep tracking this option pain level. A shift in option pain will provide a new level for expiry.

Bank Nifty Options strategy: Iron Condor

Possible adjustments: Shift call spread to 200 points down after a breakdown from 26900. Same shifty Put spread 200 points up after a breakout from 27600.

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Post your comments in the comment box if you have a query related to weekly analysis and Options strategy. You can ask any question related to options trading in the comment box.

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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.

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