Weekly Analysis and Option Strategies For the 29th April – 3rd May 2019

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Hello guys,

Hope you all are doing good in your trading. As I always say Risk Management is the only Holy Grail to make money in this stock market, If you follow this no market can kick you out. And if you manage to survive here, Profit will come automatically.

When we are taking a trade, Only two things in our hand. One is our entry and second is our stop loss. Target is not in our hand, the Only market will tell us that the analysis we do is right or wrong. And this is the mistake most of the novice traders do. They all are keeping their focus on the target, Which is not in their hand and the thing is in their hand (Our stop loss/our Risk) they don’t care about. And results either their trading positions becomes investments or they lost so much and leave this market after saying that Share trading is a gamble.

This is not Gamble but like every other business needs, a systematic approach is required here also. How systematically you are managing your trades will only create a difference, Which will lead to a successful Trading.  Remember One thing ” Successful Trading is not a myth.” Just need proper discipline. if you can do that, No market can kick you out.

Let’s come to our weekly analysis:



Nifty IDX: 11754.65

Nifty 50 ChartAfter getting a roller coaster ride in Nifty, This week Nifty close at 11754.65. If we look at the daily chart, We find that after a good upside movement, Now Nifty is trading in a range only. In fact last week it made a new all-time high but profit booking at higher levels drag nifty again in that range. A proper breakout or breakdown is required for further movement in Nifty. Based on the Fibonacci retracement tool, 11856-11556 is the range need to break for further movement in nifty. So We can make a strategy based on this range Until we are not getting a good breakout or breakdown.

One thing we have to keep in minds is Volatility. Volatility is very high nowadays and that’s the main reason for this Roller coaster ride. India VIX is trading at 21.72 after made a high of 25.35. High Volatiltyhas its own advantages and disadvantages. if you can manage your trade with proper risk management, It could be your best friend but if you are not keeping your risk management on the higher side, it will blow your whole account in just one wrong trade. So manage your trade wisely.

Based on Weekly Option Chain data, Highest Open stands at 11800CE and 11700 PE followed by 11700 CE & 11600 PE. PCR stands at 1.1 which is a neutral zone. An equally important indicator, Option pain stands at 11700, indicating expiry at that level. a shift in Option pain will give new levels. So keep tracking this Option Pain level. If we look at the change in Open Interest, around 10lakh open interest build at 10700 PE, which means 11700 is acting as a support level and traders not expecting much downside movement in Nifty.  So keep the following Change in Open Interest.

Monthly Strategy: Bull Call Ladder SpreadBull Call Ledder Spread

It’s a monthly expiry strategy. As IV started coming down, It will give you a good profit if Nifty consolidates in a range. Now Possible adjustments. If Nifty Hit 11900, Close 11900 CE and sell one lot of 12100 CE. Same as if Nifty hit 12000, Closed 12000 CE and sell 12200 CE. Keep 11800 CE as it is. Risk is Unlimited above 12200 so track actively.

BankNifty IDX: 30013.50

BankNifty Chart

After made an all-time high at 30669.80 last week, BankNifty made a low of 29455.45 on Tuesday. Almost 800 points move in just 3 trading sessions. This is because of the highly volatile market. last 3 trading days BankNifty try to recover from lower levels. 30650- 29650, This 1000 point range is acting as support & Resistance for BankNifty. Only Breakout or breakdown will lead to further levels. Those holding Long positions can book some profit here. A new position is not advisable until we are not getting any clear breakout or breakdown.

As volatility is High in the market, we can expect this type of moves in the coming sessions too. so any directional trade will create problems. trade with limited risk strategies and avoid any positional trades in futures if you are not hedging your position. The overall trend is UP.

Based on Weekly Options Chain Data, highest open Interest stands at 30500 CE & 29500 PE followed by 3000CE & 29700 PE. PCR of all strokes stands at 1.2, which is a neutral zone. Based On data, 30300 & 30500 is acting a strong resistance for this week, On lower side 29700 & 29600 is acting a short term support levels  Option pain Stands at 29900 levels, which is expecting Expiry level. A shift in Option pain will decide further move. So this week Trading range is 30300-29700 based on current data available.

Weekly Strategy: Iron Condor

Iron CONDORPost 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.

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Weekly Analysis and Option Strategies

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.

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