Nowadays, the market is unpredictable. Every day we can see wild moves in both directions. In the first half, the market gives us an upside movement, and it looks like that trend is complete UP. We are getting the same move in the second half too, but the direction is opposite. In this weekly analysis options strategies post, let’s talk about how we can deal with this situation.
In these wild movements, you can see that we are not going anywhere despite these movements. The market is trading in a range only. When the market is trading in a range, you will get many whipsaws in any strategy. At this time, the most important thing is, “How do you keep yourself calm to make a better decision?”
If your decisions are coming from your emotions, emotions like “Fear or Greed,” then it’s a dangerous thing, especially for a retail trader. You should work and develop a system that can help to keep yourself calm in every situation.
Now you have two options. It would be best if you taught yourself how to handle your emotions or create a system that can help keep yourself calm in any situation. I prefer an easy one, i.e., creating a system that can help keep you away from any emotional decision. Now the question is:
How to create that system?
As per my experience, We will find ourselves trapped in emotions only if we are getting something unexpected. Like an unexpected profit or a sudden loss. So if we manage to create a system that can help keep our risk and reward on the limited side, our 50% of work will be done.
Rest 50% is to follow and implement that system with proper discipline. This is the crucial part which you have to teach yourself. In starting, it may look a little tight because you don’t have that experience, but once you start following and gain some experience, you will get your confidence back, and things will become smooth for you. Now you will ask:
Do we need to need to create a new or unique system for ourselves?
NO, We don’t need to create any new or unique system for ourselves. We already have. We have “Non-Directional Limited Risk Options Strategies.” Options strategies like Iron Condor, Butterflies, etc. These strategies help keep your risk on the limited side and generate some consistent return without any worry about a gap-up or gap-down opening in this highly volatile market. Like the market, we can see nowadays.
My reasons to follow and trade with these strategies are simple. I don’t want to spoil my quality time with my kids because tomorrow’s market may gap-up or gap-down due to global or domestic news.
I don’t want to spend the whole night looking at my phone screen to track SGX-Nifty because it is behaving unexpectedly.
We all want a stress-free life. A Stress-Free experience is only possible when you know how much max loss you can get if tomorrow’s market opens gap-up or gap-down by 20%+. I know the probability is very low in such events, but why take a risk when you have responsibilities. After all, we all are trading to generate some extra income to fulfill our obligations.
I hope now you understand; it’s more important that we need a system that helps us generate some consistent return and help keep our risk on the limited side to protect our capital. And these “Non-directional Limited risk strategies” are working very correctly.
So I suggest you should start learning and implementing these strategies, especially in this highly volatile market. We, too, have a unique Option Strategies – A Mentorship Program where you can learn and implement these strategies with my live mentorship. I will be there to help and solve all your queries related to options strategies.
Nifty weekly analysis with options strategies
After a gap-up opening on Monday, we saw a sharp decline in the nifty. As I have shared in my last weekly analysis post that 16700 – 17050 is acting as a reversal zone based on the Fibonacci retracement tool.
This week we saw a huge decline but manage to sustain above 17050 – 17000 zone. Now this zone is acting as a strong support zone for the coming week. A breakdown will lead to the next support level i.e. 16000.
The short-term trend is down, so any upside movement here should be a Sell-on-rise opportunity.
On the upside, 17500 is acting as a resistance level and a successful breakout will trigger a long signal. So as per my analysis, 17000 – 17500 is no trade zone. A breakout from 17500 or a breakdown from 17000 will trigger a new Buy or Sell trigger respectively.
Nifty weekly Options Chain analysis
Based on option chain data, the highest Open interest stands at 18000 CE & 17000 PE, followed by 17300 CE & 16500 PE. PCR of all strikes is 0.49, which indicates an oversold market. PCR at 16800 stands at 10, which is acting as an immediate support level.
The Put-call ratio at 17300 stands at 0.23, which is acting as a resistance level. Equally, important indicator Option Pain is at 17100, indicating weekly expiry at 17100. A shift in option pain will provide further levels of expiry. So keep tracking max pain.
Significant open interest buildup on the call side, which indicates that the market is facing resistance from the higher side. So as per the weekly analysis and Open Interest data
- support 2 = 16500,
- Support 1 = 16800,
- Resistance 1 = 17300 and
- Resistance 2 = 17500
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
Initially, you can keep a stop loss of 16800 & 17300 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 16800, 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 17300. 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(60% OFF).
BankNifty Weekly Analysis with options strategy
The almost same setup appears in BankNifty also. Took support in the reversal zone ( 50% – 60%) and now waiting for a breakdown or a breakout for a fresh short or long trade.
Based on the Fibonacci extension tool, 38000 is acting as the 23.6% level that is acting as a resistance level for a fresh buy trade. So you should initiate a long trade only above 38000.
On the downside, 34800 is the support level and a breakdown will initiate a new sell trade for further upside levels.
So based on the chart, 34800 & 38000 are the two levels you should keep on the radar.
What do you think, Banknifty will take support around 34800? This level is very crucial in terms of sentiments. A breakout will attract more negative sentiments, and we may see some more downside levels here.
This is the best time to think about hedging. Protection of your portfolios is more important than anything else right now.
Bank Nifty Weekly options chain analysis
Based on option chain data, the highest Open interest stands at 37000 CE & 35000 PE, followed by 36000 CE & 36000 PE. PCR of all strikes is 0.47, which indicates an oversold market. PCR at 35000 stands at 10, which is acting as an immediate support level.
The Put-call ratio at 36500 stands at 0.34, which is acting as a resistance level. Equally, an important indicator “Options Pain” is at 36000, indicating weekly expiry at 36000. 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 best Weekly Options Strategy: Iron Condor
If you find that BankNifty gives a breakdown and sustaining below 35100, 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 36600. 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(60% OFF).
Much Check this also– Performance of the Option strategies, Nifty & BankNifty Weekly Analysis with Option 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
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*( Please avoid any questions 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 options 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 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.