Hello friend, I hope you are safe and healthy in this COVID-19. Nowadays, the market is highly volatile. In this type of market, your risk management plays a major role.
Without proper risk management is hard to service. That’s why in mostly all my weekly analysis posts; I’m giving more importance to Risk management.
In this type of market always try to protect your capital and take a recalculated 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 Must Check these also:
Nifty chart this week:
In my last weekly analysis and options strategy post I shared that 4815 & 15196 act as important levels. A breakout from 15196 will give us a new upside level till 15577, and a breakdown from 14815 will drag nifty to the lower level till 14343.
The overall trend is UP, and there is no sign of weakness. Now we have a range of 15200 to 14800, giving us a range-bound activity in nifty until we will not get a breakdown or breakout.
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 16000 CE & 14500 PE, followed by 15000 CE & 14000 PE. PCR of all strikes is 0.62, which is a neutral zone. PCR at 14800 stands at 10, which is acting as an immediate support level, PCR at 15300 stands at 0.37, which is acting as a resistance level. Equally, substantial indicator Option Pain is at 15200, indicating weekly expiry at 15200. 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.
Keep tracking open interest to analyze market participants’ behavior. If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
Nifty Weekly Option Strategy: Modified Iron Condor
Possible adjustments for Nifty weekly option strategy
If you find that Nifty gives a breakout and sustaining above 15500 or loss is more than 2500₹, then square off this strategy.
Banknifty chart this week:
In the last banknifty weekly option strategy post, I shared that the overall trend is UP in banknifty and there is no sign of weakness. The same we saw this week.
Banknifty was traded in a range of 36500 to 34900 this week. Now 37000 – 37800 is acting as a powerful resistance zone. A breakout from this level will lead to higher levels.
On the downside, 34500 act as strong support zones. Below 34500, we can test 32500 again. So at this time, no fresh BUY or SELL trade advisable. Let’s wait for a breakout or breakdown to initiate a fresh trade.
Those holding longs can hold with a stop loss of 32500. Now 36500 – 34500 seems like a range for a range-bound activity in BankNifty. Better trade with a range-bound strategy until we are not getting any breakout or breakdown.
Bank Nifty option chain analysis
Based on option chain data, the highest open interest stands at 37000 CE & 35000 PE followed by 36000 CE & 34000 PE. PCR of all strikes stands at 0.61, which is a neutral zone. PCR at 35000 stands at 3.02, which is acting an immediate support zone. PCR at 36500 stands at 0.15, which is acting as an immediate resistance zone. Option pain stands at 35800, 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: Broken wing butterfly
Possible adjustments: As you can see it’s a high risk strategy on the upper side. so take this strategy only if you can manage it actively. As soon as Bank Nifty hit and sustain above 36500 you can square off this strategy. If you loss is more than 2500₹. Square off too.
To learn the advanced adjustments, you can enroll to our Option Strategies – A Mentorship Program
Much Check this also- Reverse Jade Lizard option strategy in BHARTIARTL, Bull Call Ladder in ZEEL, Iron Condor in SBIN, Weekly Analysis & Option Strategies For 10th Oct Exp, Why People Lose Money & Nifty and Bank nifty index analysis with Option Strategy, Weekly Analysis and Options Strategy For the 6th May – 10th May 2019, Best Monthly Income Strategy in DIVISLAB for Feb 2021
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DISCLAIMER: – we are not a SEBI research analyst. Views posted in this weekly analysis post and weekly options strategies are 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 for interpreting specified analysis methods. This information should only be used by investors and traders aware of the risk inherent in securities trading.