Hello guys, I hope you all doing good. In this weekly analysis with option strategy post, I try to share my view based on the technical and Option chain data every week.
As I shared last week, Nifty and bank nifty both are trading in a range. The overall trend is UP and every dip should be an opportunity for BUY. A short trade might be a trap here.
This week we saw Nifty and Bank nifty both were trading in a range. On Wednesday and Thursday, we saw some profit booking on higher level because of monthly expiry on Thursday, But again on Friday, both the indices are showing some strength towards an Upside rally.
Now, What can we expect in January expiry? As you know, the Budget session will start in February, So what I feel is, Market will remain in a range only in January expiry too.
India VIX is trading at 11.02, which indicates that Volatility is low in market and the market is not expecting a wild movement in the coming days. So any range bound strategy should be our strategy for this month.
- 1 Nifty weekly analysis with option strategy
- 2 Banknifty Weekly analysis with option strategy
- 3 Looking for the Best strategy for Bank Nifty Future?
- 4 Options Strategies – A Mentorship Program
Nifty weekly analysis with option strategy
You can see that Nifty made a new all-time high this week. Last 2 trading sessions we saw some Profit booking but the trend is still UP and strong.
Now Upside levels, 12700 & 13200 are the targets for the short term. On downside 11800 is acting as a strong support level. Stoploss must be below this level only.
If we talk about weekly prospective, 12000 is a very strong support level and 12500 is the resistance. I’m expecting Nifty will remain in this range only. Let us look at the Option chain data.
Nifty Option Chain analysis
Based on option chain data, the highest Open interest stands at 12300 CE & 12200 PE, followed by 1200 CE & 12100 PE. PCR of all strikes is 1., which indicates an overbought market. PCR at 12100 stands at 3.84 , which is acting as an immediate support level.
The Put-call ratio at 12300 stands at 0.28, which is acting as a resistance level. Equally, important indicator Option Pain is at 12200, indicating weekly expiry at 12200. A shift in option pain will provide further levels.
Significant open interest buildup on PUT sides, Especially 12200 PE, 12150 PE & 12100 PE, which indicates that the market is facing some push from the lower side. Based on Option chain data, 12200, 12100 are good support levels & 12300 & 12400 are good resistance levels for this expiry.
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: Iron Condor
Because IV is low, That’s the reason we are not getting that much of credit and risk: reward ratio is not favorable. So if you are not comfortable with this strategy, simply avoid this.
You can keep 12400 as a stop loss or if you are loosing more than 2000₹, close this strategy.
Banknifty Weekly analysis with option strategy
Last week we saw a new all-time high in bank nifty. Now 32000 is acting as a support level, which was acting as a strong resistance level previously.
The Overall trend is UP and there is no sign of weakness in this index. So any short trade would a trap. As you know banknifty is a little extra volatile compared to nifty, so range should be a little bigger for banknifty.
On the downside, 31000 is acting as a second strong support level here. Our stop-loss should be below this level now. 32700 can be the first target and 33500 can be our second target for a long trade here.
Bank Nifty option chain analysis
Based on option chain data, the highest Open interest stands at 32500 CE & 32000 PE, followed by 32400 CE & 32200 PE. PCR of all strikes is 1.23, which indicates an overbought market. PCR at 32200 stands at 2.02, which is acting as an immediate support level.
The Put-call ratio at 32500 stands at 0.25, which is acting as a resistance level. Equally, important indicator Option Pain is at 32300, indicating weekly expiry at 32300. A shift in option pain will provide further levels.
If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
Bank Nifty Weekly Option Strategy: modified Iron Condor
Because the overall trend is UP, so I have created this strategy to optimize for an upside movement. NO risk on Upperside. Risk is on downside only. If you find BankNifty is giving a breakdown from 32100. Just square off this strategy.
To learn the advanced adjustments, you can enroll to our Option Strategies – A Mentorship Program
Much Check this also-Best Option strategy for a sideways movement in PNB, A high probability option strategy in NIITTECH, Modified Condor Option Strategy in VEDL, Bull Call Ladder in ZEEL, Iron Condor in SBIN, Weekly Analysis & Option Strategies For 5th dec Exp, Why People Lose Money & Nifty and Bank nifty index analysis with Option Strategy A high probability options strategy in YESBANK, Bull Call ladder strategy in ITC for OCT Expiry
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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.