Hello guys, I hope you all are doing good. In this weekly analysis with option strategy post, I’m trying to share what range we can consider before initiating a weekly option strategy for the coming week.
This week we saw a new high in the market. Both the indices are trading at an all-time high. We can see buying in all the sectors. Nifty IT and Metal sectors are the top gainers this week.
FIIs are net buyers from last month. Bought more than 4000cr in the Cash market in the last few trading sessions. Which is good sign for this sustainable rally in the market.
As i shared earlier that that overall trend is up and every dip should be a buying opportunity in this market. Do not trap yourself in a short trade. Always follow you risk management rules.
Nifty weekly analysis with option strategy
You can see that Nifty is trading at a new all-time high. On 17th December, nifty gave a breakout from a previous all-time high which was acting as resistance from the last few trading sessions.
In the last 3 trading sessions, we saw a very good upside movement in Nifty which is giving a very good positive sign. The overall trend is Up. First short term target we can expect 12500.
Our medium-term target is 13200 in nifty and I think we might see that level very soon. So go long and invest in some good quality stocks.
On the downside 11800 is still acting as a very good support level. We will only short once we got a breakdown from the 11800 level. Let us look at OI data.
Nifty Option Chain analysis
Based on option chain data, the highest Open interest stands at 12300 CE & 12200 PE, followed by 12400 CE & 12100 PE. PCR of all strikes is 1.62, which indicates an overbought market. PCR at 12200 stands at 2.42, which is acting as an immediate support level.
The Put-call ratio at 12400 stands at 0.15, which is acting as a resistance level. Equally, important indicator Option Pain is at 12200, indicating weekly expiry at 12200. A shift in option pain will provide further levels.
Significant open interest buildup on PUT sides, Especially 12200 PE, 12250 PE & 12300 PE, which indicates that the market is facing some push from the lower side. Based on Option chain data, 12200, 12100 are good support levels & 12300 & 12400 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.
Nifty Weekly Option Strategy: Modified butterfly
Book the loss and close the strategy if you find that nifty gave a breakdown from 12200 and sustaining below this level.
Weekly analysis in Hindi [Youtube]
Banknifty Weekly analysis with option strategy
This week we saw a new all-time high in bank nifty. Now 32000 is acting as a support level, which was acting as a strong resistance level previously.
The Overall trend is UP and there is no sign of weakness in this index. So any short trade would a trap. As you know banknifty is a little extra volatile compared to nifty, so range should be a little bigger for banknifty.
On the downside, 31000 is acting as a second strong support level here. Our stop-loss should be below this level now. 32700 can be the first target and 33500 can be our second target for a long trade here.
Bank Nifty option chain analysis
Based on option chain data, the highest Open interest stands at 32500 CE & 32000 PE, followed by 33000 CE & 31500 PE. PCR of all strikes is 1.3, which indicates an overbought market. PCR at 32000 stands at 4.28, which is acting as an immediate support level.
The Put-call ratio at 32500 stands at 0.21, which is acting as a resistance level. Equally, important indicator Option Pain is at 32300, indicating weekly expiry at 32300. A shift in option pain will provide further levels.
If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
Bank Nifty Weekly Option Strategy: Iron Condor
Because of the few trading sessions in the coming week, the premium is very low. We are not getting that much of premium. So better take a low-risk strategy. We will square off this strategy if banknifty gives a breakout or breakdown from 32000 – 32500.
To learn the advanced adjustments, you can enroll to our Option Strategies – A Mentorship Program
Much Check this also-A high probability option strategy in NIITTECH, 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 A high probability options strategy in YESBANK
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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.