Hello guys. I hope you all are doing well. In this Weekly Newsletter, I’m sharing a market trend based on my analysis and reading. In this post, I’m sharing Nifty and bank nifty weekly expiry strategy too. So read this post till the end to know which method I’m using to generate my weekly return and what should be the adjustments if anything goes wrong.
I will share how I’m calculating a range and based on that range which option strategy I’m selecting for the coming week. I’m getting good feedback for this weekly newsletter which is encouraging me to do something better for you. In this weekly analysis post, I’m trying to share whatever I have learned in my 11+ years of trading career. I hope my experience and knowledge will help you to make some better decisions.
In the last few weeks, we saw very high volatility. High volatility is bringing some good opportunities to make good returns but brings high risk too. So focus more and more on Risk Management right now. When volatility is high, that means you will get good credit, and it helps to create some high probability non-directional strategy in the market to generate some consistent return. But Your risk must be limited. Otherwise, it will hurt you very badly.
You can see that 70% of the time market consolidates in a range. So If we are creating a non-directional strategy, the Chances to make money are higher than a directional strategy. Because 70% accuracy the market itself giving to us. That’s the main reason I prefer some non-directional strategies most of the time instead of Directional strategies. These non-directional strategies not only help you to generate monthly returns but help you to keep your risk on the limited side.
One more the biggest benefit of using these non-directional strategies is: These strategies help to absorb market fluctuation. In the last few trading sessions, you may have observed that both Nifty and BankNifty are trading in a range but fluctuation is very high which triggers the stoploss on both sides.
So in this type of market when fluctuation is high, It’s important to keep your range a little wide and follow the risk management rule.
Weekly analysis with Nifty weekly expiry strategy
Now let us look at the chart and option chain data for the coming week to deploy the Nifty and Bank Nifty weekly expiry strategy.
If you look at the chart, you will find that for the last few weeks, Nifty is trading around the reversal zone of 17565 – 17817. Above 17817 we can expect further upside levels and below 17565 we may expect further downside levels.
But the downside movement we saw in the last 2 trading sessions indicated some more weakness in the coming sessions. The overall trend is also down and there is no sign of recovery.
So at the current levels, we can follow a sell-on-rise strategy. This means, every upside movement till 17800 can be treated as a selling opportunity. If you already holding a short trade, then keep holding it until the Nifty will give a sustainable breakout from the 17800 – 18000 zone.
Now, on the downside, 17205 is acting as the immediate target and below 17205 we may hit 16747 in the near term.
So, it’s the best time to hedge your long-term portfolios with options to minimize the impact of downside movement in the market.
Nifty Option Chain Analysis
Based on option chain data, the highest Open interest stands at 18000 CE & 17400 PE, followed by 17500 CE & 17300 PE. PCR of all strikes is 0.7, which indicates a neutral market. PCR at 17200 stands at 8.91, which is acting as an immediate support level.
The Put-call ratio at 17700 stands at 0.23, which is acting as a resistance level. Equally, the important indicator “Options Pain” is at 17400, indicating weekly expiry at 17400. 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 and people are more convinced that Nifty will fall in the coming sessions.
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.
Best Nifty Weekly Expiry Strategy: Modified Iron Condor
Initially, you can keep a stop loss of 17150 & 17650 for this strategy. This 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 17150, then square off the call spread and bring it down to 200 points lower levels.
The same thing you can do with put spread means if you got a breakout from 17650. You can shift your put spread to 200 points up.
Apart from the above adjustments, we will do some reverse buying also to reduce the risk. We will share these in our premium channel. You can join by clicking on the below button.
Weekly analysis with Bank Nifty Weekly Expiry strategy
Same as Nifty, BankNifty is also trading in a range. In the first two trading sessions, we were expecting some breakout from the 41500 – 41800 zone that may trigger a long trade but couldn’t sustain at a higher level and gave a sharp decline in the last 2 trading sessions.
Now based on the chart, 39958 – 41548 is the zone, where banknifty is trading right now. and it is advisable to trade with a range-bound strategy only until we are not getting any fresh breakouts or breakdowns from this range.
If there breakdown, we may see 38827 on the downside. On the upside, we may see 42531 if a breakout from 41548.
One thing you have to keep in mind here is that the overall trend is down and a breakout from 41548 is required to change the trend to bullish from bearish.
So when the trend is bearish, we have to follow a sell-on-rise type opportunity if there is any recovery till 41548. Here I avoid any directional bet until I will not see any sustainable breakout or breakdown.
Personally, I believe that Banknifty should fall from here due to the global crisis, and we may see some more downside levels in the coming week. But as we both know that the market is supreme, we should always keep ourselves ready for unexpected moves. So trade with a proper hedge only, especially if you are holding an overnight position.
Bank Nifty option chain analysis
Based on option chain data, the highest Open interest stands at 41500 CE & 40500 PE, followed by 40500 CE & 40000 PE. PCR of all strikes is 0.59, which indicates a neutral zone. PCR at 40000 stands at 4.76, which is acting as an immediate support level.
The Put-call ratio at 41000 stands at 0.36, which is acting as a resistance level. Equally, the important indicator Option Pain is at 40500, indicating weekly expiry at 40500. 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 expiry Strategy: Modified Iron Condor
Initially, you can keep a stop loss of 39650 & 41300 for this strategy. This 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 39650, then square off the call spread and bring it down to 700 points lower levels.
The same thing you can do with put spread means if you got a breakout from 41300. You can shift your put spread to 700 points up.
Apart from the above adjustments, we will do some reverse buying also to reduce the risk. These adjustments we share in our premium channel. You can join by clicking on the below button.
To learn the advanced adjustments, you can enroll in our Option Strategies – A Mentorship Program
Much Check this also-
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- High probability Reverse Jade Lizard Option Strategy in LTMay 30, 2023
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DISCLAIMER: – we are not SEBI research analysts. Views and strategies are 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 for interpreting specified analysis methods. This information should only be used by investors and traders who are aware of the risk inherent in securities trading.