The WeeklyTrade – Best Weekly Indian Market Outlook for 12th May Expiry

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Hello Guys, I hope you are doing good. In this fourth edition of our weekly market newsletter (Indian market outlook), we will cover the weekly Indian market outlook, Important levels, sector analysis, a few stock analyses, and option hedging strategies for Monthly income.

This is the advanced version of our previous weekly Indian market outlook articles. This 5-section weekly newsletter is full of valuable information but as you know nothing is perfect so your valuable feedback is highly required.

So without wasting your time, Let’s start with our first segment i.e. Weekly India Market Outlook

Weekly Indian Market Outlook and Important levels

In this section of our weekly market newsletter. I will share the weekly Indian market summary and try to find the trend and levels for the coming week. So read it carefully and if you have any queries feel free to type in the comment box.

In the week gone by, global stock markets witnessed a see-saw movement due to multiple factors. Central banks globally have started hiking interest rates in response to high inflation and faltering GDP.

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The prospects of more rate hikes from central banks in the US to India are making investors anxious. The ballooning inflation at home and abroad is fueling concerns over demand growth and economic recovery across the globe.

In the recent untimely meeting, RBI came out with a surprise rate hike and this led to a sell-off in Nifty as well as Bank Nifty.

To note, the revised repo rate now stands at 4.40 percent and the CRR at 4.5 percent.

With most of the negative factors in play, FII selling has once picked up in Indian stock markets.

On the data front, Automobile retail sales in India rose 37% in April on a low base of COVID-hit year-ago period. On a year-on-year basis, all vehicle categories including passenger vehicles and two-wheelers were up as compared with April last year.

Activity in India’s dominant services sector grew at its fastest pace in five months in April on strong demand, prompting firms to add jobs for the first time since November, a private survey showed, but sky-rocketing inflation remained a major concern. With all the major events behind us, the focus would return to earnings and upcoming macroeconomic data.

Let us look at the chart to understand the trend based on the technical:

Weekly Analysis and Important levels for Nifty

Nifty chart today - weekly indian market outlook

After spending weeks in the wide range of 16800 – 17500 finally, Nifty gave a breakdown from its crucial support level of 16800 and closed at 16411.25 this week with a big gap down on Friday.

As I have shared in the last weekly market newsletter, Although the trend looks sideways and the Nifty still holds its immediate support level i.e. 16900, we can neglect the possibilities of some more downside levels in the coming weeks.

We got that breakdown on 4th May and Nifty made a low of 16623.93 which changed its trend from sideways to complete bearish. RSI is also giving a sell signal here.

Now two things you should keep in mind here:

  1. After this fall, Nifty took support around its 50%retracement level i.e. 16370. The next support level (61.8% retracement level) is at 15850. Normally this 50% – 61.8% zone acts as a reversal zone.
  2. After this fall, there is a huge gap of almost 200 points that needs to fill.

So we need to trade a little cautious here. Don’t just take aggressive short positions here. Wait for some reversal. Right now Nifty is in sell-on-rise condition, so keep 16800 as the sell-on-rise level here.

Means short few quantities below 16300 and rest at 16800 with a stop loss above 17500.

The next crucial support level is 15850. This is the last hope of any recovery in Nifty. A sustainable breakdown from 15850 will drop the Nifty into the complete grip of bears and we may see some serious downside levels this year in the Market.

So if you have long positions in your portfolio then it’s time to hedge your portfolio. Do not take aggressive long positions for the short term.

On the upside, 17572 is the immediate resistance and a breakout will generate a new BUY signal in Nifty.

Trade Plan for the coming week: If Nifty manages to give a breakdown from 16300 the creates a short position for the next target of 15900. And If Nifty manages to hold 16300 then wait for some upside till 16800 and then create short position with a stop loss above 17500.

Volatility is also increasing, which is giving a good chance to deploy some limited risk range-bound strategies for the coming week expiry.

If you don’t know how to deploy these range-bound strategies, can learn from our Mentorship program. Hit the below button to know more:

Weekly Analysis and Important levels for BankNifty

BankNifty Chart - indian market outlook

Almost the Same setup we can see in BankNifty. With a gap down BankNifty hit our first target of 34800 and closed below it’s crucial level of 34770. That indicates a complete bearish trend in BankNifty.

Now If you are holding a shirt trade as I have suggested in the last weekly newsletter, then hold it with a revised stoploss of 36200.

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If you don’t have any short position in BankNifty then 34700 is the level should keep in your mind for a short position in Nifty. Keep a stoploss above 36200 for the coming week.

The next target in BankNifty is 32900.

As a safe trader, I prefer to trade with a limited risk range-bound strategy here. That I will share in the next section of this weekly newsletter.

Derivative Analysis of Nifty and BankNifty

Heavy selling was seen in Indian markets in the week gone by as Nifty indices nosedived sharply towards two month lows tracking global as well as domestic factors.

Bank nifty also got hammered badly last week as the index closed below 35000 mark with a loss of more than 4%.

From the derivative front, call writers were seen adding hefty open interest at 16800 & 16700 strikes while put writers were seen shifting at lower bands, which clearly shows a lack of buying interest.

Implied volatility (IV) of calls closed at 19.28% while that for put options closed at 20.19.

The Nifty VIX for the week closed at 20.29%.

PCR OI for the week closed at 1.44 lower than the previous week which indicates more call writing than put writing.

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Sector analysis – Weekly Indian Market Outlook

In this segment of our weekly market newsletter. I will try to analyze the different sectors. We will pick 2-3 sectors that we can keep on the radar for the coming week.

Almost all the sectors closed in red with heavy selling in the market this week.

Midcaps and smallcaps are the top looser this week. Closed with more than 6% loss this week.

Selling presure in all sectors is creating a cautious signal for the market. We may see some more downside levels in the coming week.

In most of the sectors, we can see some profit booking from the higher levels. For the next week, you can keep the Nifty IT and Nifty PSUBANK sectors on your Radar with a bearish view.. Let us look at the chart:

Sectors Chart - indian market outlook

All the sectors like Midcaps, small caps, IT, etc are in a bearish trend and we may see some more downside levels in these sectors.

The nifty METAL sector has given a fresh breakdown from its important support level last week so this could be on your selling list. National Aluminium, Hindalco, and VEDL are the top bearish stocks in this sector where we saw some good buying in TATASTEEL around the 1258 level. So you can invest in TATASTEEl for long-term prospectives.

So overall trend of the market is weak and we may expect some consolidation with a downside movement.

Stocks to buy for short term today

In this segment of our weekly market newsletter, I will share a few stocks that look good for a short-term view based on purely technical. To find these stocks I’m just scanning stocks those giving a fresh breakout from their 52-week high and volumes are quite impressive. So this week’s stocks are:

1- COSMOFILMS: CMP: 2027.55

In the last couple of sessions, we have seen a very good buying interest in this stock. Volumes are quite impressive and trading its 52-week high zone.

Looks good for medium-term prospects for the targets of 18% to 22%. For short term, You can keep a stoploss below 1775 and if you can hold for the medium-term can keep a stoploss below 1600.

Performace – last week’s picks

Stocks to buy today
Please Note: I’m using 20000₹ for every stock to maintain diversification.

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Open Interest Analysis for the coming week

In this segment of our weekly Indian market Outlook newsletter, I will share my view and analysis about open Interest data. We will try to find the important support, resistance and the range of market for the coming week.

Nifty Option Chain analysis – Weekly Indian Market Outlook

Nifty Open Interest for 12th May

Based on option chain data, the highest Open interest stands at 17000 CE & 16000 PE, followed by 17500 CE & 15500 PE. PCR of all strikes is 0.45, which indicates an oversold market. PCR at 16200 stands at 10, which is acting as an immediate support level. The second support stands at 16000 with a PCR of 10.

The Put-call ratio at 16700 stands at 0.15, which is acting as a resistance level. Equally, the important indicator “Options Pain” is at 16500, indicating weekly expiry at 16500. A shift in option pain will provide further levels.

Significant open interest buildup on the CALL sides indicates that Nifty is facing good resistance from higher levels. Based on Option chain data, 16200 and 16000 are acting as good support levels. On the other hand 16700, and 17000 are acting as good resistance levels for this expiry.

Keep tracking open interest to analyze market participant’s behavior. If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.

BankNifty Option Chain analysis

BankNifty Open Interest for 12th May - weekly Indian market outlook

Based on option chain data, the highest Open interest stands at 36000 CE & 34000 PE, followed by 35500 CE & 34500 PE. PCR of all strikes is 0.56, which indicates an oversold market. PCR at 34000 stands at 10, which is acting as an immediate support level.

The Put-call ratio at 35500 stands at 0.18, which is acting as a resistance level. Equally, the important indicator “Options Pain” is at 34700, indicating weekly expiry at 34700. A shift in option pain will provide further levels.

Significant open interest buildup on the CALL sides indicates that Nifty is facing good resistance from higher levels. Based on Option chain data, 34000 and 333500 are acting as good support levels. On the other hand 35500, and 36000 are acting as good resistance levels for this expiry.

Keep tracking open interest to analyze market participant’s behavior. If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.

Weekly Options Strategies for 12th May Expiry

In this segment of our weekly market newsletter, I will share weekly option Strategies for coming expiry with adjustments. So watch this space for limited risk weekly option strategies.

Nifty weekly Option Strategy for 05th May Expiry

Nifty weekly Option strategy for 12th May

Possible adjustments for Nifty weekly Option Strategy

Initially, you can keep a stop loss of 16100 & 16700 for this strategy. Means square off if you find nifty is giving a breakout or breakdown. Or you can do this adjustment too.

If you find that Nifty is giving a breakdown and sustaining below 16100, then square off the call spread and bring it down to 400 points lower levels.

The same thing you can do with put spread means if you got a breakout from 16700. You can shift your put spread to 400 points up.

If you want to learn these strategies and their adjustments in more practical ways with live mentorship, You can enroll in our Option Strategies – A Mentorship Program.

BankNifty weekly Option Strategy for 05th May Expiry

BankNifty weekly Option strategy for 12th May

Possible adjustments for BankNifty weekly Option Strategy

Initially, you can keep a stop loss of 33600 & 35300 for this strategy. Means square off if you find banknifty is giving a breakout or breakdown. Or you can do this adjustment too.

If you find that BankNifty is giving a breakdown and sustaining below 33600, then square off the call spread and bring it down to 1000 points lower levels.

The same thing you can do with put spread means if you got a breakout from 35300. You can shift your put spread to 1000 points up.


If you want to learn these strategies and their adjustments in more practical ways with live mentorship, You can enroll in our Option Strategies – A Mentorship Program.

Much Check this also- 

Post your comments in the comment box if you have a query related to this weekly Indian market Outlook. You can ask any question related to options trading in the comment box.

If you need More real-time assistance on the Nifty and Bank Nifty weekly expiry strategy or want to deploy these hedging strategies for monthly Income, Can take our premium subscription or open a trading account with us and you will get real-time assistance every month on these Options hedging strategies. You can contact us on WhatsApp.



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Best Option Strategy for Intraday in Nifty and BankNifty

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DISCLAIMER: – we are not a SEBI research analyst. Views are posted in this weekly market newsletter 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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