Weekly Market Analysis: The market is at an all-time high. What next?

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Hello friend. I hope you are safe and healthy in this COVID-19 pandemic. In this weekly market analysis post, I’m sharing the Nifty and Bank nifty trend with support & resistance for the coming week. So please read this post till the end to know the trend, support, and resistance, targets & stop loss, and the best nifty and bank nifty weekly options strategies with their adjustments.

The market is all time high; Yesterday, Sensex touched the 50k mark. We are entering monthly expiry week, and the budget session is about to start. The market will be highly volatile in the coming sessions. So what should be our strategy here to protect our profit and the capital from any unexpected movement?

When we are trading in this profit. One thing we should keep in mind that profit is only yours when you book on time. So the first step here is to book your profit. You can book it partially or fully; it’s totally upon you. If you have a long term portfolio, you can hedge it by buying some protective puts or cover calls.

The next step is: prepare yourself for any unexpected movement in the market. We all know that market is supreme and any time it can surprise you. So we have to keep ourselves ready for any unexpected movement, or it is not bad if I say, be ready for the worst. When we keep ourselves ready for the worst, we will plan in advance for the steps we will take in that situation.

Because your reaction is the most important thing at that time. If you are calm, you can make some better decisions. and to keep yourself calm you have to work on your risk management. for example, if I’m taking a strategy today, I always think that tomorrow market will open gap-up or gap-down by 20%. So in that case, How much maximum loss I will face?

If my maximum loss is under my bearable capacity, I will only deploy and hold that position overnight because I can keep my calm until only when the loss is under my risk-taking capacity. That’s why I always prefer some limited risk-strategies for overnight positions (You can click here to learn these strategies with me). So always think about the worst and keep yourself ready in advance.

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So these are the steps I always follow to initiate a strategy and manage my trades. Now. Lets us look at the charts and other data to find the trend and support resistance for the coming week.

Weekly market analysis: Nifty50

Nifty chart today

Nifty continues its bull rally this week too. Made a new all-time high 14753.55 on Thursday. Now when Nifty is at an all-time high, what should be our strategy here?

I believe follow the market blindly. I believe in reacting instead of predicting. Ride the trend and act only when you have a solid reason to react. Right now, there is no sign of weakness, so no need to take a contra trade here. Just follow the trend that is UP right now. So keep your long trade and find a buy-on-dips opportunity with any decline.

Few more thing we should keep in mind here: Market is all-time high so we can’t neglect a fall due to profit booking on the higher levels. So book your profit partially or hedge your positions. We are heading to the budget session so volatility will be very high in coming sessions, so trade with limited-risk strategies now.

Now, based on the chart, 14820 is acting as the immediate resistance level (which is our first target too). And 14050 is acting as the immediate support level here.

A breakout from 14820 will lead to a higher level at 15300 and a breakdown from 14050 will lead to a lower level at 13570. Keep following on Twitter for real-time updates.

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Nifty Weekly market analysis based on Option Chain data

Based on option chain data, the highest Open interest stands at 15000 CE & 14000 PE, followed by 14800 CE & 14500 PE. PCR of all strikes is 1.04, which indicates a neutral market. PCR at 14300 stands at 5.18, which is acting as an immediate support level.

The Put-call ratio at 14800 stands at 0.09, which is acting as a resistance level. Equally, an important indicator, i.e., Option Pain, is at 14500, indicating weekly expiry at 14500. A shift in option pain will provide further levels.

Significant open interest buildup on Call sides indicating that nifty is facing resistance from higher levels and expecting bearish activity in the coming week. Based on Option chain data, 14400 & 14200 are the support levels & 14800 & 15000 are the 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

nifty weekly options strategyy

Possible adjustments:

Initially, you can keep a stop loss of 14250 & 14800 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 14250, 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 14800. 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 enroll in our Option Strategies – A Mentorship Program(33% OFF expiring very soon).

Weekly Market analysis: Bank Nifty

Banknifty weekly trend analysis

After given a breakout from its crucial resistance level, i.e.,25200, we saw an excellent recovery in BankNifty. BankNifty is trading it in a time-high zone, and there is no sign of weakness.

After made a all time high at 32842.30 on Thursday, we saw some profit booking from the higher levels. I suggest, you should book profit in your long trade because:

We can’t neglect the possibility of profit booking in this continuous rally, so keep your trades with a proper hedge. 32600 is the level we should keep on the radar. A sustainable recovery will lead to the next target of 33300.

On the downside, 30850 is acting a the immediate support level. A breakdown will lead to 29500 and A sell signal will only generate after a breakdown from 29000. So if you see a downfall from the current level, our strategy should be buy-on-dips until BankNifty is holding 29500.

Bank Nifty weekly option chain analysis

Banknifty weekly option chain analysis

Based on option chain data, the highest Open interest stands at 32000 CE & 31000 PE, followed by 32500 CE & 31500 PE. PCR of all strikes is 0.71, which indicates a neutral market. PCR at 31000 stands at 6.83, which is acting as an immediate support level.

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The Put-call ratio at 32000 stands at 0.42, which is acting as a resistance level. Equally, important indicator Option Pain is at 32400, indicating weekly expiry at 32400. 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: Broken wing butterfly

Banknifty weekly option strategy

Possible adjustments:

This strategy is a directional strategy with bearish view. So If you find that BankNifty gives a breakout and sustaining above 32300, then book loss and square off this strategy.

If loss is more then 3000₹, you can square off this strategy.

If you want to learn these Weekly expiry options strategies and their adjustments in more practical ways with live mentorship, You can enroll 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 SessionA low-risk options strategy in LICHSGFINAn iron condor options strategy in ICICIBANKReverse Jade Lizard options strategy in UPLA high probability options strategy in YESBANK

Post your comments in the comment box if you have a query related to weekly analysis and options strategies. You can ask any question related to option trading in the comment box.

If you need More real-time assistance on Nifty and Bank nifty weekly analysis and options strategies Can take our premium subscription or open a trading account with us and you will get real-time assistance every month on these weekly options strategies. You can contact us on WhatsApp

*( 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. Weekly analysis, Views or the options strategies 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.

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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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