Hello Guys, How’s Your trading going? In our last Nifty & Bank nifty Chart, we were talking about the downside movement and now we are sitting with upside movement in Index. Although our both side targets(Downside we shared on Blog and Upside we shared on Twitter) already hit. But the question is “Where is market going?” Sometimes it goes up in opening hours and then eats all its gain in last hours, sometimes market indicates a bearish signal in early hours and then recover in last hours. There is no clear indication for further movement in the market. And when the market is trading in a range that is the best time for Option writers like us. But is it a good time to go for naked option writing or any unlimited risk strategies? Let’s find out what is coming in Chart today :
Nifty Chart Today: 11910.30
- This is the 60-MIN chart of Nifty, You can see that Nifty took support at 50 HMA (Hourly Moving Average), Here I’m not drawing any new levels because previous Fibonacci levels still working perfectly.
- You can see there is a good resistance around 11900 on Nifty Chart, Today Nifty was trying to break this level and somehow manage to close above that level. Tomorrow will be the Make or break like situation for Nifty, If Nifty manages to sustain above that level then we can see some higher levels.
- Here we should not forget about the budget session which is about to start and coming sessions would be highly volatile. Just for precautions keep your positions with a proper hedge.
- On Nifty Chart, Index is not looking week, but as we all know that there is lots of uncertainty in the market due to global concerns so better we should keep our positions with proper hedge or you can diversify your portfolio with higher % of your portfolio in large-cap stock.
- On the daily chart, We got a hammer pattern, which is a positive signal, RSI & MACD are also supporting, so as per current chat, Short term trend is looking UP. Let’s look at the Option Chain Data :
Open Interest analysis :
- Based on Nifty option chain data, the highest open interest stands at 12000 CE & 11800 PE followed by 11900 CE & 11700 PE. PCR of all strikes is 1.22 which is a slightly overbought zone. PCR at 11850 stands at 3.22 & 11800 stands at 4.47 which is acting as an immediate support zone, PCR at 12000 stands at 0.15 which is acting as an immediate resistance level. Equally, important indicator Option Pain is at 11900, indicating expiry at 11900. A shift in option pain will provide further levels. For more about Put Call Ratio (PCR) Visit here
- Today Huge short buildup at 11850 & 11900 PE and short covering at 12000-12200, giving a positive indication for high levels. So as per current data, Market participants are not expecting much downside in Nifty, until we are not getting any short covering on PUT side.
- Based on Current data, Range should be 11800-12000. Need to track Open interest more closely for further levels.
Bank Nifty Chart Today: 31268.75
- We can see on bank Nifty Chart that There is a range of 400 points in which Bank nifty is trading. There is a strong resistance around 31400 and Bank nifty still giving respect to that level.
- On the Lower side, 31000-30900 is a strong support zone, and we’ll only act if we got a Sustainable breakdown from that level.
- The budget session is important to Banking sectors especially after getting liquidity problems in the NBFC sector. If Budget fails to cheer this sector then we may see huge selling pressure in the Banking sector.
- As per my analysis, 30500 & then 30100 should be the levels we should keep on the radar, if Bank Nifty manages to sustain below 31000 then we may see 30500, 30000 and then 29600 because 50 DMA is around 29600.
- As we know, every fall could be an opportunity for those who missed the previous rally. So If we got 29600, That should be a good level to buy more.
- On the upper side, 31700 is acting a strong resistance level, New Buy will trigger only above that level.
- So keep your positions with proper hedge and be ready for every market movement. Let the marker generate alpha for you by its own.
Open Interest analysis :
- Based on Bank Nifty option chain data, the highest open interest stands at 31500 CE & 31000 PE followed by 31400 CE & 31100 PE. PCR of all strikes stands at 0.88 which is a neutral zone. PCR at 31000 stands at 6, which is acting an immediate support zone. PCR at 31500 stands at 0.12 which is acting as an immediate resistance zone. Option pain stands at 31300, giving us expiry level. Keep tracking this option pain levels. A shift in option pain will give us a new level for expiry.
- Today we saw a huge open Interest buildup around 31500 CE, 31400 CE & 31300 CE. 31100 PE also added around 2.43 lakh open interest. This indicates that Bank Nifty is facing resistance on higher levels and not expecting much Upside movement in this weekly expiry.
- Now it will be very interesting to watch whether Bank Nifty will follow these levels, or we’ll get new levels for weekly expiry in Bank Nifty.
BankNifty option Strategy for this week :
- Normally I’m making Short strangle on the last two days of expiry but this week I suggest go with a calendar spread to limit your risk.
- You can Short ATM Call & Put and Buy next week same strike Call & Put.
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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.