Nifty and Bank nifty index analysis with Option Strategy

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Hello Guys, I hope you are doing good with option strategy for nifty and Bank nifty index we are sharing every week. Nowadays there are lots of negative news we can see on various channels about the nifty index. Some are blaming the government and some are saying valuations are high.

In our weekly post, we are keeping more focus on technicals and what I feel is, charts says everything. If we closely follow charts you can easily get the idea about what is happening in the market.

We can see nowadays volatility is very high. High volatility opens the door for new opportunities but brings high risk along with it too. As an option writer, risk management should be the first priority.

So this is my one and only suggestion, Always look at the risk. Before initiating a trade, try to calculate your risk first. Always look at how much you will lose if your prediction fails. Profit is not in our hand but our risk is. So better we should look only on those things which are in our own control and let the market do whatever it wants to do.

Many traders always ask a question, “Are you bullish or bearish in this market?” I always say that I’m neutral. Neither I’m bullish nor bearish. I’m just keeping my focus on trade management. I’m keeping only that risk which I’m willing to lose.

Because the market will go based on my predictions, I’m not sure. But the market will go against my prediction, that’s what I’m 100% sure. So what will be my adjustments, when the market starts moving against my prediction. That plan I always keep ready. It always helps me to make better decisions.

Now let’s try to find out what the Nifty index says on the chart.

Nifty index analysis:

If you look at the Nifty index chart, you can see that 11150 – 11200 is a very crucial zone. If nifty index gave a breakout from this level it is acting as strong support and after a breakdown, it is acting as a strong resistance level.

After a breakdown on 30th July from 11200, Nifty is struggling for a breakout. Around 4 times nifty gone up and try to break that 11150 – 11200 zone but couldn’t sustain.

We are with sell-on-rise strategy until Nifty Index is sustaining below that resistance zone. On downside 10800 is acting a strong support zone. 11200 – 10800 is Fibonacci retracement zone too. So we can expect some range-bound activity until we are not getting a clear breakout or breakdown.

Open Interest Analysis:

Based on option chain data, the highest Open interest stands at 11100 CE & 11000 PE, followed by 11000 CE & 10900 PE. PCR of all strikes is 1.28, which indicates an overbought market. PCR at 10900 stands at 5.6, which is acting as an immediate support level.

The Put-call ratio at 11100 stands at 0.27, which is acting as a resistance level. Equally, important indicator Option Pain is at 11000, indicating weekly expiry at 11000. A shift in option pain will provide further levels.

If you don’t know how to analyse open interest. Just enrol for our Option Strategies – A Mentorship Program.

Nifty Option 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 10900. Keep put spread as it is. Same thing you can do with put spread after a successful breakout from 11100.

For more advanced adjustments, Enroll to our Option strategies mentorship program

Bank Nifty Index Analysis:

Bank Nifty Chart today

Bank Nifty index is trading below to its Crucial zone which is acting as a strong resistance zone. The trend is still down and a Sell-on-rise should be our strategy until bank nifty is trading below its crucial zone.

A breakout from 28500 will only give a new buy signal. On downside 26700 is strong support, a breakdown will lead to lower levels.

Based on the current chart pattern of bank nifty index, I’m expecting some range-bound activity. between 28000 – 26800. A range-bound strategy should be our trade.

BankNifty Open Interest Analysis:

Based on option chain data, the highest open interest stands at 28000 CE & 27500 PE followed by 28500 CE & 27000 PE. PCR of all strikes stands at 1, which is a neutral zone. PCR at 27500 stands at 8.76, which is acting an immediate support zone.

The put-call ratio at 28000 stands at 0.2, which is acting as an immediate resistance zone. Option pain stands at 27800, giving us expiry level. Keep tracking this option pain level. A shift in option pain will provide a new level for expiry.

Bank Nifty Option Strategy: Butterfly

Bank Nifty Option strategy

Possible adjustments: Shift call spread to 200 points down after a breakdown from 27700. Same shifty Put spread 200 points up after a breakout from 28300.

Wanted to learn some advanced adjustments? Enrol to our Option strategies mentorship program

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Post your comments in the comment box if you have a query related to Nifty and bank nifty index with Option strategy. You can ask any question related to options trading in the comment box.

If you need More real-time assistance on this Nifty & Bank nifty Index and Option strategy, Can open a trading account with us and you will get real-time assistance on every month on these hedging strategies. You can contact us on WhatsApp through the button on the left side of your screen.

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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Sachin Sival is the founder and CEO of Replete Equities, an options trading company that specializes in delta hedging. A self-taught trader, Sachin has a passion for volatility trading and stock trading. Sachin loves to hone his skills by reading up on new strategies and techniques as well as taking part in industry events. In addition to being a successful entrepreneur, Sachin also takes pleasure in photography - as a hobby.

3 thoughts on “Nifty and Bank nifty index analysis with Option Strategy”

  1. I hv only been loosing money in market for last 3. Years.
    Hv lost more than 16 lakh in F&O only.
    Left with very less capital to trade.
    Should I contemplate Quiting trading ??

    Or still with ur strategies I can earn 2k daily?
    2k daily or 10k weekly is what I can settle for

    • Dear Sanjeev,
      I think you have tried enough things in the last three years. I suggest, instead of trying new things, you should try to find out what are the reasons you are losing continuously. No one has any secret of making money here. So stop running behind anyone. Trading required lots of patience and discipline to earn consistently. You should try to find where you are standing right now, and based on your situation; you should look for guidance.


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