Hey folks! I hope you are doing good. The market is highly volatile ahead of the budget session. In this weekly market update, we will try to analyze the trend of two major indices. In this weekly post, I will also share the nifty and banknifty weekly options strategies. So please read this post till the end to know the strategies and their adjustments.
After made an all-time high, we saw a sharp decline due to week global sentiments and profit booking on the higher levels. FIIs were the net buyer in the January expiry but in the last 4 trading sessions, FIIs sold more than 6000cr in the cash segment.
Rollover data indicates – Short rollover to Feb series and indicates caution before the budget on 1Feb.
We are seeing lower buying interest in the Feb series as carried over positions are 10% less in the index and 20% less in index options compared to the previous month. Bigger hands have carried more short positions compared to the previous two months.
They have reduced buy position and did lower rollover to Feb indicating low buyers interest. Nifty top 10 stocks have also seen short rollover and delivery based selling in the last 5 day of expiry
Rollover data Conclusion– Caution before the outcome on Budget on 1st Feb. Let us look at the chart and open interest data to know the support and resistance for the coming week.
Nifty weekly market update
After made an all-time high on 21st January 2021, we saw a sharp decline in Nifty. As I have shared in my last weekly market update that 14050 was acting as the immediate support level, and a breakdown will lead to 13570. This week we got that breakdown, and Nifty is heading towards our downside target of 13570.
If you look at the Fibonacci tool, 13831 is acting as the make or break level. If Nifty manages to sustain above this level, we may see a new rally again and initiate a new long.
But if we got a sustainable breakdown from 13831, our new target will be 13247, and that a breakdown from 13247 will generate a short signal in Nifty.
Right now Nifty is trading in a no trade zone, so avoid any new fresh position for short to medium term holdings.
Now based on the charts: 13247 to 14774 is the range we can expect till we are not getting a new breakout or breakdown from these levels.
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Nifty weekly market update based on option chain data
Based on option chain data, the highest Open interest stands at 14000 CE & 13800 PE, followed by 14300 CE & 13500 PE. PCR of all strikes is 0.71, which indicates a neutral market. PCR at 13500 stands at 10, which is acting as an immediate support level.
The Put-call ratio at 14200 stands at 0.09, which is acting as a resistance level. Equally, an important indicator, i.e., Option Pain, is at 13900, indicating weekly expiry at 13900. 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, 13700 & 13500 are the support levels & 14200 & 14300 are the resistance levels for this expiry.
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Nifty Weekly Option Strategy: Iron Condor
Initially, you can keep a stop loss of 13450 & 14250 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 13450, 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 14250. You can shift your put spread to 300 points up.
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Weekly Market Update: Bank Nifty
After made a all time high on 21st January 2021, we saw a sharp decline in Banknifty. Now based on the Fibonacci retracement tool, 29900 is acting as the immediate support level.
After hit the trailing stop loss at 30000, right now, BankNifty is trading in a no-trade zone. A breakdown from 29900 can lead to the next lower levels of 28970 & 28080.
I want to share one more thing, the medium trend is UP, so any decline till 28000 should act as a Buy-on-dips opportunity. A breakdown from 28000 will change the trend. So act accordingly.
Bank Nifty weekly market update based on option chain data
Based on option chain data, the highest Open interest stands at 32000 CE & 29000 PE, followed by 31000 CE & 30000 PE. PCR of all strikes is 0.79, which indicates a neutral market. PCR at 31000 stands at 3.01, which is acting as an immediate support level.
The Put-call ratio at 30000 stands at 0.19, which is acting as a resistance level. Equally, important indicator Option Pain is at 30500, indicating weekly expiry at 30500. 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: Iron Condor
If you find that BankNifty gives a breakdown and sustaining below 28850, then Shift your Call spread to 1000 points down.
The same thing you can do with put spread means if you got a breakout from 31600. You can shift your put spread to 1000 points up.
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).
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DISCLAIMER: – we are not a SEBI research analyst. Weekly market update, 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.