Weekly Market analysis with option strategies for March 02, 2023 Expiry

Hello guys. I hope you all are doing well. The market is highly volatile. In fact, 2023 is the year of high volatility. In my weekly market analysis and options strategies post, I’m sharing that we should trade with proper risk management.

Risk management is the only holy grail to get success in stock trading. Analyze your risk profile first and choose a product or segment to trade that suits your risk profile.

This February month was highly volatile due to due to global and domestic news. We saw some big movement in both directions this week also. Despite wild movement on either side, you can see the market is not going anywhere. In this type of market, it is tough to make a directional bias, so we should trade with limited risk strategies.

Because volatility is high, premiums are also high, and when premiums are high, that is the best time to create some credit spreads. But that’s not mean that you should initiate short strangle or straddles. It would be best if you limit our risk instead of taking unlimited risky bets.

I always teach students in my Mentorship program that you can keep some extra risk on the upside, but your risk must be limited on the downside. The reason is: that upward movement is always slower than downward movement. You will have time to adjust to the upside movement, but the downside movement will not give you time to adjust your positions.

In simple words, the Downside movement brings high risk and is always strong compared to the upside movement, so we have to keep limited risk on the downside. Choose your strategies accordingly.

Let’s come to our weekly analysis and option strategies for the March 02, 2023, weekly Expiry. Let’s look at the chart first,

Nifty weekly market analysis and options strategies

This week we saw a sharp decline from the higher levels and Nifty managed to give a breakdown from 17565 which is the 61.8% retracement level and acting as an important support level.

I have shared short video on youtube where I have mentioned these levels and further levels. You must check this:

Now if you look at the Fibonacci tool you will find that 17565 & 17817 are 61.8% & 50% retracement levels respectively. This zone acts as a reversal zone. If Nifty manages to sustain below this zone then we may see some more downside movement.

Now when Nifty broke the important support level and close below this level, we can expect further downside movement till the next support level i.e. 17205.

The overall trend is DOWN and you can follow a sell-on-rise strategy. You can initiate a short trade if you find Nifty is sustaining below 17565. But don’t take high risks and keep your position with a proper hedge. Use tight stop losses for your long or short positions or use options to limit your overnight risk.

Nifty weekly market analysis based on option chain data

Option chain data indicates that the highest open interest is at 17500 CE & 17000 PE, followed by 18000 CE and 17500 PE. The PCR of all strikes is 0.58, which indicates a slightly oversold market. PCR at 17200 stands at 10, which is acting as an immediate support level.

The Put-call ratio at 17800 stands at 0.14, which is acting as a resistance level. Equally, an important indicator, i.e., option pain, is at 16650, indicating weekly expiry at 17550. A shift in option pain will provide further levels.

Significant call open interest suggests that the nifty is facing strong resistance from higher levels, and traders are shorting more calls than puts, implying that the market will be bearish in the coming week. Based on Option chain data, 17200 & 17000 are the support levels & 17800 & 18000 are the resistance levels for this expiry.

Keep tracking open interest to analyze market participants’ behavior if you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.

Nifty Weekly Expiry Strategy: Modified Iron Butterfly

Possible adjustments:

For this strategy, you can initially set a stop loss between 17250 and 17750. This means you should square off if you notice the nifty making a breakout or a breakdown. Or you can do this adjustment too.

If you find that Nifty is giving a breakdown and sustaining below 17,200, then square off the call spread and bring it down to 300-point lower levels. You can also reverse buying on put speed to reduce the loss on the put side.

You can do the same thing with a put spread to see if you get a breakout from 17800. You can shift your put spread to 300 points.

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. (30% off for today only)

Bank Nifty Weekly analysis with weekly expiry strategy

As for Nifty, We saw a sharp decline in BankNifty as well. But BankNifty hasn’t given a breakdown from the reversal zone and 39958 is acting as an important support level.

I have shared in the above YouTube video that BankNifty has to give a sustainable breakdown from 39958 for further downside levels.

triedOn Thursday, BankNifty made a doji candle and tried to maintain this support zone, but again on Friday, it gave a downside move with a bearish candle. Now we have to wait, and the next 2-3 days of closing are important to make a decision.

The overall trend is down, and a short trade is advisable below 39500 for the target of 38900. But it would be best if you maintained your position with a proper hedge. To limit your downside risk, use tight stop losses for your long or short positions, or use options.

On the upper side, 40753 is the crucial resistance level, and a long trade will trigger only after a successful breakout from 40800.

Pro tip: High IV (implied Volatility) is giving a good opportunity to initiate limited risk options strategies. High IV means more premium received as credit. That will increase the probability and reduce the risk per spread. So think about limited risk strategies.

Bank Nifty weekly market analysis based on option chain data

Option chain data indicates that the highest open interest is at 40000 CE & PE, followed by 41000 CE & 39000 PE. PCR of all strikes is 0.56, which indicates a slightly oversold market. PCR at 39500 stands at 5.02, which is acting as an immediate support level.

The Put-call ratio at 40500 stands at 0.19, which is acting as a resistance level. Equally, an important indicator, i.e., Option Pain, is at 40000, indicating weekly expiry at 4000. A shift in option pain will provide further levels.

A significant buildup of open interest around call sides indicates a bearish trend in banknifty for the coming week. Based on Option chain data, 39500 & 39000 are the support levels & 40500 & 41000 are the resistance levels for this expiry.

Keep tracking open interest to analyze market participants’ behavior if you don’t know how to analyze open interest. Just enroll for our Option Strategies – A Mentorship Program.

BankNifty Weekly Expiry Strategy:

Possible adjustments:

For this strategy, you can initially set a stop loss at 39300 and 40800. This means you should square off if BankNifty shows a breakout or breakdown. Or you can do this adjustment too.

If you find that BankNifty is giving a breakdown and sustaining below 39300, then square off the call spread and bring it down to 800 points below current levels. You can do the reverse buying on the put spread to minimize the downside risk.

You can do the same thing with a put spread to see if you get a breakout from 40800. You can shift your put spread to 800 points.

I will do these adjustments in our premium telegram channel. To be part of that premium telegram channel, either you can enroll in a Mentorship program of take a monthly subscription for that premium channel.

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.

Post your comments in the comment box if you have a query related to weekly market updates and option strategies. You can ask any question related to options trading in the comment box.

If you need more assistance in creating these weekly options strategies, You can contact us on WhatsApp

*( 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. 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.