Hello guys. I hope you all are doing good. In this Weekly Newsletter, I’m sharing a market trend based on my analysis and reading. In this post, I’m sharing Nifty and bank nifty weekly expiry strategy too. So read this post till the end to know which method I’m using to generate my weekly return and what should be the adjustments if anything goes wrong.
I will share how I’m calculation a range and based on that range which option strategy I’m selecting for the coming week. I’m getting good feedback for this weekly newsletter which is encouraging me to do something better for you.
In this weekly analysis post, I’m trying to share whatever I have learned in my 8 years of a trading career. I hope my experience is helping you to make some better decisions.
In the last few weeks, we saw very high volatility. High volatility is bringing some good opportunities to make good returns but bringing high risk too. So focus more and more on Risk Management right now.
When volatility is high, that means you will get good credit, and it helps to create some high probability non-directional strategy in the market to generate some consistent return. But Your risk must be limited. Otherwise, it will hurt you very badly.
You can see that 70% of the time market consolidates in a range. So If we are creating a non-directional strategy, the Chances to make money is higher than a directional strategy. Because 70% accuracy the market itself giving to us.
That’s the main reason I prefer some non-directional strategies most of the time instead of Directional strategies. Now let us look at the chart and option chain data for the coming week to deploy a strategy.
Weekly analysis with Nifty weekly expiry strategy
In the last weekly analysis post, I shared that 14815 & 15196 is the range for nifty. We may see some range-bound activity until nifty is trading between this range.
Last week, we saw a breakdown from 14815, and Nifty almost hit our next bearish level (14350) I suggested two weeks before. Now, again this week we saw that Nifty was trying to give a breakdown from 14350 but later it took its support and respect this level.
A breakdown from 14350 will generate a Short signal here. Right now, I’m not holding any trade. A long trade stops out at 14800 with a trailing stop-loss and New short we will initiate after a sustainable breakdown from 14350. Follow my weekly newsletter, where I will share When I initiate a short trade.
On the Upside, 15200 is acting as the resistance zone, and a breakout will generate a new long signal. So wait for a new buy or sell signal and trade with range-bound strategies till then.
Nifty Option Chain analysis
Based on option chain data, the highest Open interest stands at 15000 CE & 14000 PE, followed by 14700 CE & 14300 PE. PCR of all strikes is 0.83, which indicates a neutral market. PCR at 14300 stands at 3.66, which is acting as an immediate support level.
The Put-call ratio at 15000 stands at 0.28, which is acting as a resistance level. Equally, the important indicator “Option Pain” is at 14500, indicating weekly expiry at 14500. A shift in option pain will provide further levels.
Significant open interest buildup on BOTH sides indicates that we may see a range-bound activity in the coming week. Based on Option chain data, 14500, 14300 are good support levels & 14800, 15000 are good resistance levels for this expiry.
Keep tracking open interest to analyze market participants’ behaviour. If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
Nifty Weekly Expiry Strategy: Iron Condor
Initially, you can keep a stop loss of 14250 & 14950 for this strategy. Means square off if you find nifty is giving a breakout or breakdown. Or you can do this adjustment too.
If you find that Nifty is giving a breakdown and sustaining below 14250, then square off call spread and bring it down to 500 points lower levels.
The same thing you can do with put spread means if you got a breakout from 14950. You can shift your put spread to 500 points up.
Weekly analysis with Bank Nifty Weekly Expiry strategy
In the last banknifty weekly option strategy post, I shared that the overall trend is UP in banknifty and there is no sign of weakness. But this week, BankNifty gave a trendline breakdown and trying to sustain below this trendline.
Now, Before you make any trading decision, Two things you need to keep in mind here:
- Overall trend is still UP and
- 32600 – 32500 is acting as a strong support level.
A sustainable breakdown from 32500 will generate a new short signal for the next targets of 31000 & 29500 for the short term. A short trade is only advisable if Bank Nifty is sustaining below 32500. Till then trade with range-bound strategies only.
On the upside, 37000 – 37800 was acting as a powerful resistance zone. A breakout from this level will lead to higher levels. The same levels will apply for the coming week also.
Personally, I believe that Banknifty should respect the 32600 – 32500 zone, and we may see a reversal from here. But as we both know that the market is supreme, we should always keep ourselves ready for unexpected moves. So I believe range-bound strategies should be our strategies here.
Bank Nifty option chain analysis
Based on option chain data, the highest Open interest stands at 34000 CE & 33000 PE, followed by 33500 CE & 32000 PE. PCR of all strikes is 0.94, which indicates a neutral market. PCR at 33000 stands at 3.34, which is acting as an immediate support level.
The Put-call ratio at 34000 stands at 0.24, which is acting as a resistance level. Equally, important indicator Option Pain is at 33500, indicating weekly expiry at 33500. 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 expiry Strategy: Iron Condor
Initially, for this bank nifty weekly expiry strategy, you can keep a stop loss of 2500₹ or (31850 & 34650) range for this strategy. Means square off if you find bank nifty is giving a breakout or breakdown from that range. Or you can do this adjustment too.
If you find that bank nifty is giving a breakdown and sustaining below 31850, then square off call spread and bring it down to 1000 points lower levels.
The same thing you can do with put spread means if you got a breakout from 34650. You can shift your put spread to 1000 points up.
Much Check this also- Nifty and Bank nifty support and resistance for tomorrow, Reverse Jade Lizard option strategy in BHARTIARTL, Bull Call Ladder in ZEEL, Iron Condor in SBIN, Weekly Analysis & Option Strategies, Why People Lose Money, Nifty and Bank nifty index analysis with Option Strategy, Best Monthly Income Strategy in DIVISLAB for Feb 2021
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DISCLAIMER: – we are not a SEBI research analyst. Views and strategies 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 for interpreting specified analysis methods. This information should only be used by investors and traders who are aware of the risk inherent in securities trading.