How to trade Nifty and Nifty Bank in the new weekly series

Markets continue to show strength like never before, factoring in the events that could give a dent to the bulls.

Nifty weekly expiry option chain witnesses PE writers actively adding their positions of more than a lakh contracts at 18000PE – over 80 thousand contracts and fresh additions of more than 60 thousand contracts as well, which has now formed super strong support for the index. CE writers exposure lies at 19,000 zones, with PCR_OI at 18,000 now being well above 1, which is the much-needed cushion now.

Option strategy recommendation: Since the movement of 400 points is expected, Long Straddle is recommended.

Weekly expiry BUY 18000CE and BUY 18000CE.

Bank Nifty option chain on weekly basis, reflects on PE writers building positions of more than 40 thousand contracts at various strikes from 40000PE, with CE writers adding exposure at 41500/42000 strikes- more than 60 thousand and 50 thousand contracts respectively, which reflects on the immediate resistance at 42000 zones for the index.

Since the immediate range is far spread, participating in Short Strangle is well suggested.

Weekly expiry : SELL 40000PE and SELL 42500CE. (SL to be maintained as per risk capacity).

P.S: Please note selling options is a high-risk play, so only traders who can understand the risk to participate.

Sector Updates:

On a weekly basis, cement, pharma and realty saw a strong upmove, except for technology which continues to show weakness. Metals could soon see a turnaround move and should be on focus.

Stocks Updates:

-Buy Hindcopper: CMP 105, TGT 109/112, SL 103.5.

-Buy

: CMP 111, TGT 120/124, SL 108.


Shilpa Rout is Lead Analyst-

Derivatives at
Prabhudas Lilladher