Many time you will see that the market is unpredictable. You saw wild moves in both directions. In the first half, the market gives us an upside movement, and it looks like that trend is entirely UP, but in the second half, it gives the exact moment, but in the opposite direction, means toward downward. In this weekly analysis options strategies post, let’s talk about how we can deal with this situation.
In these wild movements, you can see that we are not going anywhere despite these movements. The market is trading in a range only. If you remember, in the last weekly analysis post, I have shared that the range of Nifty is 14900 to 14500, but on Monday, we saw a good rally in the market and later on Tuesday, it made a high of 15137. Now everyone starts saying that now Nifty will go UP but what happened on expiry? Nifty returned and expired in the same range we have shared in my weekly analysis report.
When the market is trading in a range, you will get many whipsaws in trend following strategies. At this time, the most important thing is, “How do you keep yourself calm to make a better decision?”
If your decisions are coming from your emotions, emotions like “Fear or Greed,” then it’s a dangerous thing, especially for a retail trader. You should work and develop a system that can help to keep yourself calm in every situation.
Now you have two options: teach yourself how to handle your emotions or create a system that can help keep yourself calm in any situation. I prefer an easy one, i.e., creating a system that can help keep yourself away from any emotional decision. Now the question is:
How to create that system?
As per my experience, you will find yourself trapped in emotions only if you get something unexpected. Like an unexpected profit or a sudden loss. So if we manage to create a system that keeps our risk and reward on the limited side, Then the system will do our 50% work. Rest 50% is to follow and implement that system with proper discipline.
Follow your system with proper discipline and patience is the crucial part that you have to teach yourself. In starting, it may look a little tough because you don’t have that experience, but once you start following and gain some experience, you will get your confidence back, and things will become smoother for you. Now you will ask:
Do we need to need to create a new or unique system for ourselves?
NO, We don’t need to create any new or unique system for ourselves. We already have. We have “Non-Directional Limited Risk Options Strategies.” Options strategies like Iron Condor, Butterflies, etc. These strategies help keep your risk on the limited side and generate some consistent return without any worry about a gap-up or gap-down opening in this highly volatile market. Like the market, we can see nowadays.
My reasons to follow and trade with these strategies are simple. I don’t want to spoil my quality time with my kids because tomorrow’s market may gap up or gap down due to any global or domestic news.
I don’t want to spend the whole night looking at my phone screen to track SGX-Nifty because it is behaving unexpectedly.
We all want a stress free life. A Stress-Free experience is only possible when you know how much max loss you can get if tomorrow’s market open gap-up or gap-down by 20%. I know the probability is very low for such events, but why take a risk when you have responsibilities. After all, we all are trading to generate some extra income to fulfil our obligations.
I hope now you understood why it’s important that we need a system that helps us generate some consistent return by keeping our risk on the limited side to protect our capital. And these “Non-directional Limited risk strategies” are working very correctly.
So I suggest you should start learning and implement these strategies, especially in this highly volatile market. We, too, have a unique Option Strategies – A Mentorship Program where you can learn and implement these strategies with my live mentorship. I will be there to help and solve all your queries related to options strategies.
Nifty weekly market outlook with options strategies
As I have shared in the last weekly analysis post that 14500 – 15000 is the no-trade zone. Nifty should give a breakout or breakdown from this range for further levels. This week, we saw that nifty gave a breakout and trying to sustain below 15000 but couldn’t succeed and expire below 15000.
As we know, the nifty is trading sideways, a new buy signal will only come after a sustainable breakout from 15500. As per the current setup, a breakdown from 14300 will generate a sell signal for a weekly trade. So till Nifty is trading between the range of 14300 to 15500, A range-bound strategy should be our trading plan.
As per the chart, Coming week range is 14500 to 15500 and 15000 is playing crucial role for the further upside movement. If nifty manages to sustain above 15000, we may see some upside till 15500. Breakdown from 15000 will lead to 14500.
As I have suggested earlier, Trade with limited risk range-bound strategies here. Learn these strategies from here: Option Strategies: A Mentorship Program
Nifty weekly Options Chain analysis
Based on option chain data, the highest Open interest stands at 15000 CE & 15000 PE, followed by 15500 CE & 14500 PE. PCR of all strikes is 1.25, which indicates a slightly over-bought market. PCR at 14800 stands at 2.07, which is acting as an immediate support level.
The Put-call ratio at 15500 stands at 0.36, which is acting as a resistance level. Equally, important indicator Option Pain is at 15000, indicating weekly expiry at 15000. A shift in option pain will provide further levels of expiry. So keep tracking max pain.
Significant open interest buildup on both the side, which indicates that the market is facing support from both the side. So as per the weekly analysis and Open Interest data
- support 2 = 14800,
- Support 1 = 14500,
- Resistance 1 = 15300 and
- Resistance 2 = 15500
Keep tracking open interest to analyze market participant’s behavior. If you don’t know how to analyze open interest for weekly option hedging strategies. Just enroll for our Option Strategies – A Mentorship Program.
Nifty weekly Options Strategy: Iron Condor
Initially, you can keep a stop loss of 15400 & 14800 for this strategy. Means square off if you find nifty is giving a breakout or breakdown. Or you can do the below adjustment.
If you find that Nifty is giving a breakdown and sustaining below 14800, then square off call spread and bring it down to 300 points lower levels.
The same thing you can do with put spread means if you got a breakout from 15400. You can shift your put spread to 300 points up.
If you want to learn these strategies and their adjustments in more practical ways with live mentorship, You can enrol in our Option Strategies – A Mentorship Program(33% OFF).
BankNifty Weekly Analysis with options strategy
In my last weekly analysis post, I have shared that we may see some downside levels if bank nifty gave a breakdown from 32000. But On Monday, BANKNIFTY gave a good upside movement and took resistance around 34000 which is also a good resistance level. Now What next?
If you look at the fibonacci retracement tool you will find that 50% level is 34089 and 61.8% level is 34947. These two levels acts as the reversal zone. In other words, we can say that we can only go long after we get a breakout from 61.8% level. So treat 61.8% level as a breakout level for a BUY signal in BankNifty.
Below 34000 which is the 50% retracement level, we may see a range-bound activity in BANKNIFTY. So focus more on range-bound strategies in BankNifty.
BankNifty Weekly options chain analysis
Based on option chain data, the highest Open interest stands at 34000 CE & 34000 PE, followed by 36000 CE & 33000 PE. PCR of all strikes is 1.01, which indicates a neutral market. PCR at 33000 stands at 2.83, which is acting as an immediate support level.
The Put-call ratio at 35000 stands at 0.22, which is acting as a resistance level. Equally, important indicator Option Pain is at 117500, indicating weekly expiry at 17500. A shift in option pain will provide further levels.
Remember one thing: When IV is high, data can change anytime so keep following more closely.
If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
Bank Nifty best Weekly Options Strategy: Iron Condor
If you find that BankNifty gives a breakdown and sustaining below32900, then Shift your Call spread to 1000 points down.
The same thing you can do with put spread means if you got a breakout from 35100. You can shift your put spread to 1000 points up.
If you want to learn these Weekly expiry options strategies and their adjustments in more practical ways with live mentorship, You can enrol in our Option Strategies – A Mentorship Program(33% OFF).
Much Check this also– Performance of the Option strategies, Nifty & BankNifty Weekly Analysis with Option strategy, Nifty Option Strategy for Budget Session, A low-risk options strategy in LICHSGFIN, An iron condor options strategy in ICICIBANK, Reverse Jade Lizard options strategy in UPL, A high probability options strategy in YESBANK
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*( Please avoid any question like which Call or Put we should buy in the coming week).
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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.