Weekly Analysis and Options Strategy For the 6th May – 10th May 2019

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Weekly Analysis and Options Strategy For the 6th May – 10th May 2019

Hello Guys, Hope you are doing good in your options trading. As we discussed in our previous weekly analysis and options strategy post, the market is consolidating in a range only. The same thing we saw this week too. This week we saw some profit booking in IT, Pharma & FMCG sector. Nifty midcap index already going down. Volatility is very high in the Market, which is not good for option writers like us. We are heading towards our General Election result which is scheduled on 23rd May, so volatility will be high during this entire month. So what should be our plan of action for coming week? As I always said, Keep your risk management is on the higher side. Once this event is over, We’ll get so many good chances to make money, But right now we have to protect our capital So that we can participate in that good movement.

Nifty IDX: 11712.25

Nifty 50 ChartWe saw a Range bound activity this entire month.  As we discussed in our previous weekly analysis and options Strategy, We are neither bullish nor bearish until Nifty is trading in a range of 11800-11550. Breakout or breakdown from this range will only give further levels. Till then trade this range only. Overall Trend is UP. There is no sign of weakness, neither in trend nor in Economy. Expecting some new Highs in this year. So a good time to buy some fundamentally strong stocks in your portfolio to ride the upcoming rally.

For a trader point of view, keep 11500 as a stop loss for your long positions, Close below will lead to lower levels till 11370 & 11220. As we are traders we can’t trade with just view, We have to act according to the market. So for me, both sides are open and I’m ready to trade in both the side. Just keep these two figures in your mind and act accordingly. But do not forget about volatility, which is already very high.

Based on Weekly Option Chain data, Highest Open stands at 11800CE and 11700 PE followed by 11900 CE & 11600 PE. PCR stands at 0.80 which is a neutral zone. PCR at 11800 is standing at 0.15, which is acting a strong resistance. On lower side PCR at 11700 is 2.15, which is acting a strong support level based on current data. An equally important indicator, Option pain stands at 11700, indicating expiry at 11700 levels. A shift in Option pain will give new levels. So keep tracking this Option Pain level.

Weekly Strategy: Iron Condor

Nifty options strategyPossible adjustments: If Nifty goes above 11820, shifty your put spread at 11750 PE sell & 11700 PE buy. If Breakdown at 11640 then shifts Call Spread, Sell 11700 CE & Buy 11750 CE.


BankNifty IDX: 29954.15

BankNifty ChartAs we discussed in our last week’s Weekly Analysis and Options Strategy post, BankNifty is trading in a range and only breakout or breakdown will lead to further levels. Right now BankNifty is facing some pressure from PSU Banks. Some stocks like HDFCBANK & Kotak Bank are contributing to go for a new all-time high in BankNifty. Keep 29650 level on the downside as a stop loss, If banknifty manage to sustain below that level, then we can expect some more downside levels till 29100 & 28635. Close above 30650 will only lead to higher levels. The overall trend is Up. But as we all know volatility is very high in the market, We can’t neglect the sudden fall or upside Movement in BankNifty. So keep your positions with a proper hedge.

On charts, it is facing huge pressure around 30000 levels which is very crucial for the coming week. Manage to sustain above 30000, we will see some more upside levels. So 30000-29650 should be our range for the coming week.

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 0.90, which is a neutral zone. Based On data, PCR at 30100 is 0.15 which is acting a strong resistance for this week, On lower side 29900 & 29800 is acting short term support levels, Because PCR is above 2.  Option pain Stands at 30000 levels, which is expecting Expiry level. A shift in Option pain will decide further move. So this week Trading range is 30200-29800 based on current data available.

Weekly Strategy: Iron Butterfly

options strategy

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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.

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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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