Replete Weekly analysis

Replete Weekly Analysis and Option Strategies For 18th Feb-22th Feb

Hello Guys.

First, we salute to our brave soldiers, Who sacrifices their lives in Pulwama terror attack. Our strong condolence to their families and we are praying for the speedy recovery for injured soldiers.

From last week, I have resumed my weekly analysis on nifty and bank nifty and started some options strategies and got a good response from our fellow traders. Last week I posted a strategy for nifty which is running with a decent return of 9.5%.

Let’s start with NIFTY IDX:10724.4

Nifty Weeklt Analysis

Last week We saw that Nifty took resistance at the 61.8% level and gave a bearish signal. This whole week we witnessed a sharp downside movement in both the indices. On Friday Nifty made a low of 10620.40 and closed at 10724.40 due to some short covering. From the last couple of weeks, nifty is trading in a range of around 250 points. This week too it respect that range. If you look at the chart, you will find that 10650-10600 is strong support zone, this must be saved if nifty wants to maintain that trading range. we haven’t got that breakdown so can’t say that we entered in bear market. On the other hand, we can’t neglect the volatility we can expect due to the coming general election. So at this point either we have to sit neutral or we should take a safe bet.

According to Monthly Expiry open interest data, Highest open interest stands at 11000 CE & 10700 PE Followed by 10900 CE & 10400 PE.  PCR of 10700 stands at 2.5 which is still a strong support level. Untill PCR of 10700 is above 1.8, we can’t expect a breakdown. Overall PCR stands at 1.08 which is in Neutral Zone.

PCR RULES YOU CAN FOLLOW:
  • PCR of all strikes in the range of 0.80 to 0.50 indicates an oversold market.
  • PCR of all strike in the range 1.25 to 1.5 indicates an overbought.
  • PCR of a particular strike below .60 is strong resistance.
  • PCR of a particular strike above 1.8 indicates strong support.

Strategy This week: Call Ratio Spread

Nifty Option StrategyA loss will start if Nifty starts moving above 10950. Keep 10950 as a stop loss. Now do one more adjustment If nifty gave a breakdown at 10600 than simply sell one more lot of 10700 CE and you can book profit in 10850 CE & 10900 CE but keep 10800 CE as it is.

BANKNIFTY IDX : 26794.25
BankNifty Weekly Analysis

BankNifty Took resistance around 27500 levels and gave a good downside movement. BankNifty gave a channel Breakdown with good volumes. The 144-day moving average is at 26613.66, which is last a strong support level. 26600-26450 is the level which we need to follow. Till BaNkNifty trading above 26450, we can’t say that we are in bear trend. But the volumes we are getting are also a whistleblower, that something is cooking. So keep your risk management rules on the higher side.

According to Monthly expiry open interest data, Highest open interest stands at 27500 CE & 27000 PE followed by 28000 CE & 26000 PE. Combined PCR stands at 1.33 which is an overbought zone. We should not initiate a short position in BANKNIFTY until it holds 26450. but m not expecting a good bounce back from here, so either we should sit neutral or initiate a safe strategy.

Strategy This week: Call Ratio Spread

BankNifty Option StrategyA loss will Start Only above 27400. Keep that as a stop loss.

Post your comments in the comment box if you have a query related to these options strategies. You can ask any question related to options trading in the comment box.

If you need More real-time assistance on these strategies, Can open a trading account with us and you will get real-time assistance on every month on these hedging strategies.

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I wish you profitable trading.

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.

About Sachin Sival

Founder of Replete Equities, Certified Market Professional, Trader by passion, Option Writer, A keen follower of the Indian equity market,

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