Weekly Analysis & Option Strategies For 20th Sep – 27th Sep 2019

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Hello guys, I hope you are following the instructions I posted in my last weekly analysis & option strategies post.

In this weekly post, I’m sharing what I’m expecting for the coming week based on the chart patterns and option chain analysis.

Chart patterns are telling, what is the current trend and option chain analysis is helping to understand market participants activity. Like where they are betting high.

Like every setup, these chart patterns and Option chain analysis also have some limitations but if you can combine both, your probability will be much better.

Pre-Diwali party starts a little early

Nowadays you can see, The market sentiments are totally weak. Global, as well as domestic concerns, are playing major roles. Government is trying to go some boost nut till now we haven’t seen any recovery.

In the continuation On Friday, the Finance Minister announced tax relief for corporates. Finance minister slashes the corporate tax rate in India to 25.17%.


Effective tax rate reducing to 25.17% will significantly improve the profitability of full tax-paying companies leading to change in roe leading to multiple re-rating, he added.

Indian indices as Sensex and Nifty registered a biggest single-session gain in the last 10 years after Finance minister slashed corporate tax rate to 25 % from 35%.

The Sensex was closed up 1,921.15 points or 5.32% at 38,014.62, while Nifty was up 569.40 points or 5.32% at 11,274.20.

Data showed that indices Sensex and Nifty surged at least 6 percent or more on 48 and 36 occasions, respectively, during the past 40 years.

On Thursday, we saw a sharp decline in the first hour. Later index manages to give a small recovery from the lower levels but the market was totally in control of the downtrend and weak sentiments.

But Friday bought a new joy in the market. Not only for traders, but investors also excited after this non-stop one side rally. Now Question comes in mind.

Is the bull market started again?

See it’s a news based rally, so will it sustain or not this need to watch. So we should not initiate a trade based on just one day action. Give one more week to market. In coming week if the market manages to sustain above all the support levels( Previously resistance levels), then only we can say that we will get a good rally from here.

So give it some time, don’t jump in a hurry. Remember one thing, Every big moment brings many good opportunities to earn but on the other hand, it brings a huge risk along with huge return too.

So take some precalculated risk and don’t try to beat the market. The market is supreme and it can surprise you anytime. Now let’s look at the Nifty chart.

Yesterday I have shared a post in which I shared a common mistake people are doing. Please click here to read that post.

Nifty weekly analysis

Nifty chart today

In my last weekly analysis & option strategies post, I shared that the Nifty index is forming a symmetric triangle pattern and a breakdown or breakout will lead to further levels.

You can see, on Tuesday we got a breakdown will very high volumes. Nifty broke the crucial support level of 10800 on weekly expiry day. 10600 was acting new support.

But after Finance minister announced a tax relief on Friday, We saw a huge buying in market and Nifty broker all its short term resistance levels. Infact nifty broke 200 Days simple moving average too and closed above that level.

Now 200 Day SMA is a level we need to keep on the radar. If nifty manages to sustain above these levels we can say that we may get some higher levels in the coming month.

Below 200 Days SMA, again we may slip to that downside range. Right now we should sit relax and let the market settle down first. Right now there is no clear indication neither a buy nor a sell, as per my analysis and current chart setup.

So I suggest we should wait and let the market settle down first. The market is full of opportunities and we should take that risk only which is worthy enough to take. The market will itself give us a new range and trend and we’ll act accordingly.

Nifty option chain analysis

Based on option chain data, the highest Open interest stands at 11200 CE & 11000 PE, followed by 11500 CE & 10800 PE. PCR of all strikes is 1.31, which indicates an overbought market. PCR at 11000 stands at 2.11, which is acting as an immediate support level.

The Put-call ratio at 11400 stands at 0.12, which is acting as a resistance level. Equally, important indicator Option Pain is at 11100, indicating weekly expiry at 11000. A shift in option pain will provide further levels.

If you don’t know how to analyze open interest. Just enrol for our Option Strategies – A Mentorship Program.

Nifty option strategy: Bull call ladder

Now before initiating this strategy, You should keep 2 things in mind.

  • It’s an unlimited risk strategy so do not initiate if you don’t know how to adjust this strategy and you are a beginner simple avoid this strategy.
  • It’s a bullish strategy, we have to initiate only of we found that nifty is manage to sustain above 11300 and it’s rising.

Possible adjustments:

Once Nifty hit 10400, you can square of 11400 and short a new call of 11600 strike. Same you have to do with 11500, means if nifty hit 11500 square off 11500 and short a new call 11700. Keep 11300 as it is.

Bank nifty weekly analysis & Option strategies

Bank nifty chart today

After FM announcement, we saw a huge rally in Bank nifty today. Bank Nifty broke all the previous resistance levels in a single day and closed up by 8.31%.


Most of the stocks were contributing in this upside rally. Bank Nifty broke all the support levels and now trading above 200 Days SMA, which is very crucial in terms of the overall trend.

Coming will decide whether a trend has changed or it’s just a news based rally which will cool down in next few sessions. Right now we are not suggestions anything, neither a buy trade nor a sell trade.

We have to wait and analyse whether bank nifty is sustaining above 200 Days SMA or not.

Bank Nifty option chain analysis

Based on option chain data, the highest Open interest stands at 30000 CE & 28000 PE, followed by 29500 CE & 27000 PE. PCR of all strikes is 1.35, which indicates an overbought market. PCR at 28600 stands at 2.13, which is acting as an immediate support level.

The Put-call ratio at 29500 stands at 0.33, which is acting as a resistance level. Equally, important indicator Option Pain is at 28400, indicating weekly expiry at 28400. A shift in option pain will provide further levels.

If you don’t know how to analyze open interest. Just enrol for our Option Strategies – A Mentorship Program.

You can see there is huge short buildup on Put Side and short covering on Call side. Indicates that now downside has locked and bank nifty is trying to form a bottom.

Coming week will give us a better picture, so I suggest we should wait and do not initiate a long or short trade at current levels.

Bank Nifty option strategies

This week I’m not initiating any strategy in Banknifty as the range is very wide and there is proper risk-reward in this range. So let’s avoid any trade this week. If I found anything which is worthy enough to take I will share on Monday.

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Options Strategies – A Mentorship Program

On the 1st of September, We have launched a new mentorship program for Option strategies, in which we’ll discuss how can we deploy these strategies? What rules we should follow before taking a trade? and what should be our adjustments if the script is moving against your direction?

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

If you need More real-time assistance on this weekly analysis & Option strategies, Can open a trading account with us and you will get real-time assistance on every month on these hedging strategies. You can contact us on WhatsApp through the button on the left side of your screen.

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.

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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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