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Hey Folks! In this bank nifty weekly options strategy post, we will analyze Nifty50 and Bank Nifty based on technicals and option chain data. I will share one weekly options strategy for each index.
In every weekly analysis post, I’m taking a common problem and try to share a possible solution for that particular problem. So read this post till the end to find all the answers you are looking for.
Somewhere we both know that successful trading is not rocket science. Anyone can learn to be a successful trader. But from where? Nowadays you have so many resources like social media channels, where you can discover the tricks and techniques, But which one to follow?
You know how these things, tricks, or techniques work, But the real problems start when you start implementing. The results you are getting, are different. You follow the same method or steps you have learned, but the results are not as per the expectations. Are you doing something wrong?
No, You are doing exactly what you have learned. You are coping with every single step you have learned from someone. Wait! Did you read it right? Take a pause and read again what I have written in the previous lines.
I said you are coping. Yes, you are copying as it is. Why I’m saying this? We all know that every person has a different mindset and different psychology. When the mindset and psychology are different, how can results be the same?
Let’s say we both, you and me, are doing the same thing, but my risk-taking capacity is different from yours. Let’s say I can take the risk of 2%, but for you, 1% is more than enough. I’m trading based on my risk appetite if you follow me and try to copy what I’m doing, somewhere you are panic when you saw your loss is more then 1%.
So what you have to do is, learn from various sources and then optimize it based on your mindset, psychology, and risk appetite. Instead of just follow a strategy, you should learn the basics of that strategy. And when you know the basics of that strategy, you can optimise it very easily.
Like, You know that Iron condor is a limited risk strategy. It’s a basic strategy, and you can create by selling one OTM Call & OTM Put and buying further OTM Call & Put. You will get profit if your script expires in a range, that happens most of the time.
But instead of just deploy this strategy, you have to understand why you are making money in that particular range. Which strike to buy and sell? What factors (Like premium, greeks, IV, etc.) help make money in that specific range?
If you know the basics of that particular strategy, you can easily optimize it based on your risk appetite, and if the script is moving against your prediction, you can easily manage and can do timely adjustments for that trade too. Trade management is essential. Because place a strategy is just one part, you will get your return from how well you are managing your trade.
So instead of just copy someone, try to understand the basics, logics, and the factors behind that trade and optimize it based on your risk appetite. Every successful trader is doing the same. Even I, too, did the same. I learned some strategies from one mentor and some strategies from another mentor. I optimize all the strategy based on my risk appetite, and the results are mind-blowing.
So initially, focus on basics and then try advanced things. If you know the basics of a particular strategy, you can easily manage the trade. And if you can manage that well, you will get your desirable return.
The same thing we are teaching in our Options strategies – A Mentorship Program, We are not just telling you the basic theory, we are providing handholding support in the real market so that you can optimize your strategy and can learn how to manage a trade well. For more details “Hit the below button“
Nifty weekly analysis with Weekly options strategy
In the last weekly market update post, I have shared that a sustainable breakout from 15000 is required for the further upside rally. On 21st May we got that breakout that helps Nifty to made a new all-time high on Friday (28th May). See what I have shared on twitter on Monday.
Based on current chart pattern, #Nifty is giving a good opportunity to go long for swing trading.
— Sachin Sival (@sachinsiwalRE) May 24, 2021
One can go long with a stoploss of 14300.
A Breakout from the all time high will lead to a new rally in #Nifty.
Disclaimer Applies!#stockmarket #nifty #nifty50 pic.twitter.com/iIshlsSpnl
Same thing we saw this week. Nifty sustain above 15000 and manage to gave a new high. now what next?
Based on the chart, 15500 is playing a strong resistance level for the further upside rally. A sustainable breakout will lead to the next upside targets i.e. 15770 & 15960. Overall trend is UP but i suggest you should wait for a sustainable breakout from 15500 if you want to initiate a fresh long trade in Nifty.
On the downside, 15000 is playing as an immediate support zone. Any decline can be treat as a buy-on-dips opportunity. You can keep a stop loss below 14500 for this positional long trade.
As per the current chart, 15800 – 15000 would be the range for the coming week.
Nifty weekly Options Chain analysis
The highest Open interest stands at 15500 CE & 15300 PE, followed by 16000 CE & 15200 PE-based on option chain data. PCR of all strikes is 0.98, which indicates a neutral market. PCR at 15200 stands at 3.44, which is acting as an immediate support level.
The Put-call ratio at 15700 stands at 0.44, which is acting as a resistance level. Equally, the important indicator Option Pain is at 15400, indicating weekly expiry at 15400. A shift in option pain will provide further levels of expiry. So keep tracking max pain.
Significant open interest buildup on both the side. So based on the OI, the possible range for this week should be 15200 – 15700.
Keep tracking open interest to analyze market participant’s behavior. If you don’t know how to analyze open interest for weekly option hedging strategies. Just enroll for our Option Strategies – A Mentorship Program.
Nifty weekly Options Strategy: Iron Condor
Possible adjustments:
Initially, you can keep a stop loss of 15700 & 15100 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 15100, then square off call spread and bring it down to 300 points lower levels and convert this strategy into an iron butterfly.
The same thing you can do with put spread means if you got a breakout from 15700. 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 enrol in our Option Strategies: A Mentorship Program.
Weekly Analysis with Bank Nifty weekly options strategy
We saw a very good rally due to short covering in Bank nifty this week. If you look at the chart, You will find that BankNifty is in complete UP Trend.
As I have shared last week that If you look at the Fibonacci retracement tool you will find that 50% level is 34089 and 61.8% level is 34947. Normally these two levels acts as the reversal zone. In other words, we can say that we can only go long after we get a breakout from 61.8% level. So treat 61.8% level as a breakout level for a BUY signal in BankNifty.
We got a breakout from 34947 on 27th May and trying to sustain above this level. A sustainable breakout will lead to the next upside target of 36160. Overall trend is UP so don’t take any contra trade.
Based on the chart, 34000 – 36000 is the current range.
This is the best time to trade with some limited risk range-bound strategies. So focus more on range-bound strategies.
Bank Nifty Weekly options chain analysis
The highest Open interest stands at 35500 CE & 35000 PE, followed by 36000 CE & 34500 PE-based on option chain data. PCR of all strikes is 0.75, which indicates a neutral market. PCR at 34500 stands at 4.34, which is acting as an immediate support level.
The Put-call ratio at 36000 stands at 0.16, which is acting as a resistance level. Equally, the important indicator Option Pain is at 35000, indicating weekly expiry at 35000. A shift in option pain will provide further levels.
Remember one thing: When IV is high, data can change anytime so keep following more closely.
If you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.
Bank Nifty Weekly Options Strategy: Iron Condor
Possible adjustments:
If you find that BankNifty gives a breakdown and sustaining below 34000, 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 36000. You can shift your put spread to 1000 points up.
If you want to learn these bank nifty weekly options strategy 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 Options strategy, Nifty Option Strategy for Budget Session, A low-risk options strategy in LICHSGFIN, An iron condor options strategy in ICICIBANK, Reverse Jade Lizard options strategy in UPL, A high probability options strategy in YESBANK
Post your comments in the comment box if you have a query related to the Nifty and Bank Nifty weekly options strategy. You can ask any question related to option trading in the comment box.
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*( 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. 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.
