Hello friend, I hope you are doing good in this highly volatile market. From the last few weeks in every weekly analysis and options strategy post, I have shared the market is completely in the grip of the bear.
There are many macroeconomic factors behind this fall. But the most important factor is the weak sentiments. No one is there to buy in this market. FIIs selling continuously. although DIIs are buying but how long they can buy this need to watch.
In this type of market always try to protect your capital and take a precalculated risk only. Don’t try to fight with the market, Just focus on your survival. If you manage to survive, profit will come automatically.
We don’t need to do anything for our target. Target will come automatically, it’s not in our hand. The only market knows what will happen next. But one this is in our hand, which is our risk or stop-loss. We have to only keep our focus on “RISK MANAGEMENT” and let the market do whatever it wants to do.
So keep your positions with proper hedge and buy good quality stocks at every fall in this market for your medium to long term perspective.
- 1 Nifty chart this week:
- 2 Banknifty chart this week:
- 3 Looking for the Best strategy for Bank Nifty Future?
- 4 Option Strategies – A Mentorship Program
Nifty chart this week:
In my last weekly analysis and options strategy post I shared that 50% – 61.8% Fibonacci retracement zone is always acting as a reversal zone but as sentiments are very weak so this time chances are very less to get a reversal from this zone.
Same we saw on Thursday, Nifty has broken it’s 61.8% retracement level with huge momentum. Now 61.80% retracement level has become resistance for Nifty. If Nifty manages to sustain below this 61.8% level which is at around 10800, we may see some more downside and our target will be 10460.
Open Interest Analysis:
Based on option chain data, the highest Open interest stands at 11000 CE & 10700 PE, followed by 11500 CE & 10500 PE. PCR of all strikes is 0.85, which is a neutral zone. PCR at 10700 stands at 2.81, which is acting as an immediate support level, PCR at 10900 stands at 0.39, which is acting as a resistance level. Equally, substantial indicator Option Pain is at 10900, indicating weekly expiry at 10900. A shift in option pain will provide further levels.
The trend is still bearish, so Need to track closely for any further shift in range as per option chain analysis.
Nifty options strategy: Bull call ladder spread
Possible adjustments: As you can see this is an unlimited risk strategy on the upper side. so take this strategy only if you can manage actively. As soon as Nifty hit 10850 you can shift 10850 to 10950. Same you have to do with 10900. Nifty hit 10900, shift 10900 to 11000 and hold.
Banknifty chart this week:
As we discuss in the last weekly analysis and options strategy post, 27100 which is also a 61.8% Fibonacci retracement levels, will act as strong support levels for bank nifty. Any reversal will come only if bank nifty manage to hold this level.
On Thursday we saw a sharp decline in the banking sector which lead to a breakdown from 27100 levels in bank nifty.
Now the downside is fully open but the upside is locked. 27100 will act as resistance from here. On the charts, there is no sign of reversal. so don’t expect any upside rally from here until bank nifty is trading below its 50% retracement level around 28000.
Only Above 28000 we can expect a sustainable rally in bank nifty. Till then sell-on-rise should be our strategy. On the downside, the next target is 25860.
BankNifty Open Interest Analysis:
Based on option chain data, the highest open interest stands at 28000 CE & 26000 PE followed by 27500 CE & 26500 PE. PCR of all strikes stands at 0.70, which is a neutral zone. PCR at 26500 stands at 7.2, which is acting an immediate support zone. PCR at 27500 stands at 0.37, which is acting as an immediate resistance zone. Option pain stands at 27200, giving us expiry level. Keep tracking this option pain level. A shift in option pain will provide a new standard for expiry.
Bank Nifty options strategy: Bull Call ladder spread
Possible adjustments: As you can see this is an unlimited risk strategy on the upper side. so take this strategy only if you can manage actively. As soon as Bank Nifty hit 27100 you can shift 27100 to 27300. Same you have to do with 27200. Bank Nifty hit 27200, shift 27200 to 27400 and hold.
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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.
8+ Years working as a derivative trader, Option Writer, Blogger, Trader by passion, Keen Follower of Indian share market