Nifty Analysis for 2nd NovNSE:NIFTY
⏺ 4/1 Hourly - High possibility of breaking 1st resistance and then reversing.
⏺ 15/5 min - Taken support on 17900. This should help in breaking second resistance of 17980.
✅ Support - 17900
❌ Resistance - 17980, 18090
📈 Trend? - Very hard to tell. I would wait till either 1st resistance or bottom support to break.
↕ Market movement - 250-300 pt
❗❗ Watch out for :
--> At the opening, most likely market will be in continuation of uptrend. And it will also break 17980 resistance level. But after that it's very likely that the uptrend will convert into downtrend if buyers are weak.
-->Even if you want to ride till second resistance, I would strongly suggest to wait for retracement on the 1st resistance of 17980 after it's broken.
--> Respect the yellow support. If it is broken, go short blindly. DO NOT short anywhere above it.
--> In case of gap up, wait & watch.
--> in the slight possibility of gap down, 17900 support becomes resistance, trade accordingly.
Search in ideas for "OPTIONS"
Expiry strategy: Sell 230 Put >1. Stock tumbled from 310 level to 235 levels in the last 5 weeks.
Recently, it witnessed sharp bounce back from low around 235 by following a reversal double bottom pattern with volume. MACD also confirms the reversal.
Any fall could invite fresh buying in this stock. Expect the stock to expire above 230 level in Oct series. Lot size:2400
USDINR Weekly Short StrangleStrategy Details:
Short Strangle: Sell an OTM call and an OTM put.
Weekly Duration: Initiating the trade on Monday and closing it by the expiry date, which is typically the end of the week for weekly options.
Potential Advantages:
Profit from Time Decay: Options lose value over time, which benefits the seller.
Range-bound Market: If USD/INR stays within the ±0.25 rupees range, the options may expire worthless, allowing you to keep the premium.
Risks and Considerations:
Unexpected Volatility: Significant news or economic events could lead to unexpected volatility, potentially leading to substantial losses.
Assignment Risk: There's a risk of assignment on the sold options, especially if the USD/INR price moves significantly.
Margin Requirements: This strategy requires a sufficient margin as it involves unlimited risk if the market moves significantly against your position.
Timing: Squaring off positions before expiry can help avoid last-minute volatility, but it also means you may not capture the full premium.
Risk Management:
Stop Loss: Consider setting a stop loss to limit potential losses.
Regular Monitoring: Keep an eye on market news and economic events that might affect USD/INR volatility.
Position Sizing: Ensure the size of the trade is appropriate for your risk tolerance and account size.
Before You Begin:
Backtesting: Test the strategy using historical data to understand potential outcomes.
Understand the Product: Be fully aware of the specifications and risks of trading USD/INR options.
Broker's Rules: Check with your broker regarding the rules and requirements for trading options and the specific margin requirements for a short strangle.
Conclusion:
While a weekly short strangle on USD/INR can be a profitable strategy in a stable, range-bound market, it's crucial to understand the risks and have mechanisms in place to manage those risks. Ensure you're well-prepared and informed before implementing this strategy, and consider consulting with a financial advisor to ensure it aligns with your overall trading goals and risk tolerance.
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Nifty Call Option Shorting Idea_21012021Yesterday, we entered into a trade for tomorrow's expiry. We also discussed about the presence of strong resistance around 14650 to 14660 levels for Nifty50, that is where we have observed some correction or reversal. Our trade for Sell 14800CE is intact, while we have shifted the short position of 14150PE to 14250PE which is a safe bet.
NIFTY Nov Second WeekI was absolutely incorrect last week. I thought the market would decline. It didn't. I thought the market would be very volatile. It wasn't. The mistake last week was prematurely calling the end of the july-started rally (and the end of the powerful third wave of the mid-June started rally). Turns out that the wave 5 of the july-started rally had more juice left. It was extending. I guess, as they say about markets, you are always just one trade away from humility. Thankfully, the advice was to buy a put option. So, the losses got limited to barely Rs. 300-Rs. 400, i.e. the option price. I will try a few more weeks of options. I will learn how much of the delta (of option greeks) goes against us and accordingly decide if options should always be used to buy/short futures. Only buying options. No writing options. Ever.
Long Term: In the long term, winter is coming. The market would correct. It has been a hell of a rally post the covid lockdown in March. It has to correct. The correction has to be significant. The market has moved around 4,500 points in that period. It has to correct in that proportion.
Medium Term: Once the extending wave 5 (of the July started rally) ends, the market should correct. From July, the market has rallied around 2,000 points. So the correction should be of that order.
Short Term: No one really knows where an extending wave ends. To me the next important level seems to be 12,341. Then 12,622. Then 13,075. We should be trying to set up shorting levels at those points.
How would I trade this: Buy put options with the strike prices of 12,341 and 12,622 and 13,075. Fingers crossed.
As always. I could be right. I could be wrong. I am always learning. Trade at your own risk.
T7 Trading System - Trend Shikari - RulesI have a trading system which I call Trend Shikari™ with which I generate tips for you. But the success of this system in real trading will come only if you are disciplined enough to follow the below rules religiously day in and day out.
Rule 1 :- Trade in Nifty based instruments alone.
There are so many NSE listed stocks, futures and options out there to trade. But its better to trade only in Nifty because
1. Nifty F&O are probably the most liquid instrument series out their and hence entry / exits are easy and instant with minimal trade slippage.
2. No insider trading and consequent volatile unpredictable moves.
3. No price splits like stocks enabling better historical analysis. Also backfill data for previous years are easily available which is pretty handy in back testing strategies.
Now Nifty Index cannot be traded as is. We can only trade in derivatives of Nifty like its futures or options. For the beginners my advice is to go with NIFTY futures. When NIFTY triggers my entry signals enter positions in Nifty Futures and when my profit or stop levels are touched by NIFTY index exit the future positions. You do pay more in charges trading futures compared to options but futures are much simpler to understand and trade in compared to options. To reduce your trading charges open an account and trade with discount brokers like Zerodha, Tradejini etc. For those who are comfortable with options better to trade in "at the money long calls or long puts" depending on my signal direction. Note that you need to trade in at least 2 lots of at the money options if you want a roughly similar point variation in your trade compared to the Nifty Index.
Note that which ever instrument you choose to trade stick with that particular instrument for at least a year before you make a switch to any other instrument.
Rule 2 :- 1% position size
Put 1% of your total capital at risk for each trade. That means if you hit stop in a particular trade then you should not be loosing more than 1% of your total capital. Based on this 1% rule size your positions for every trade. Also make sure that the number of lots of Nifty F&O instrument you start trading with remains constant at least for a year even if the accumulated profits may allow you to put in more lots.
Rule 3 :- Take all signals
We don't win always. We don't loose always. But we don't know absolutely when we are going to win or loose. Also I have a system where most often when I win I make more money than when I loose. Also my hit ratio is slightly above 50%. This means if you take all my signals with the same position size, then in the end you are most likely to make money from my system.
Rule 4 :- Put advance limit orders whenever possible.
I usually give signals much before the price is at the entry levels. When ever you get my signal enter an order in the broker trading terminal with the appropriate entry price, profit and stop loss levels marked. This way your trade entries and exits happen easily with less slippage. You also void the possibility of missing signal entries / exits.
Sometimes though I do give the entry level at CMP in which case enter the trade immediately.
Rule 5 :- Do not break any of the four rules above.
Hope this info helps you to become a better trader. Thoughts, questions and suggestions are welcome.
01Nov2024 - NIFTY - Predictions (Next Trading Day)1. Index Chart Details:
Index: Nifty 50 Index
Date: October 31, 2024
Time Frames:
1 Day (1D)
1 Week (1W)
1 Month (1M)
2. Support and Resistance Levels
From the detailed extracted information regarding the daily chart:
Support Levels:
24,000.00
23,750.00
23,500.00
Resistance Levels:
24,372.45
24,500.00
24,700.00
3. Market Scenario Prediction
Based on the patterns observed in the charts, here is a prediction for the market scenario for the next trading day:
Market Opening Flat to slight gap down Market is likely to open around 24,206.35
Market Trend Bullish initially , then range-bound Will start bullish but possibly level off
4. Options Strategies
Considering the analysis of the current trend, here are suggested strike prices for options trading:
Buy Call Options: Strike at 24,205, as it is near the current close and has a likelihood of moving upward.
Put Options : If the market starts to show weakness, watch for opportunities at 24,000 support.
5. Calendar Spread Strategy
5a. Calendar Spread Strikes:
Daily Chart: Buy Option at 24,205 (short-term move)
Weekly Chart: Buy Option at 24,205
Monthly Chart: Buy Option at 24,000 for a hedge
5b. Trends:
Daily Slightly Bearish
Weekly Neutral
Monthly Bullish
6. Trading Advice on ATM, ITM, or OTM Options
In terms of trading options based on market behavior:
ATM Trade During market opening, if bullish
ITM Don't Trade Unless closing near support level
OTM Better Not to Trade Expected to remain stagnant
Conclusion
This analysis provides specific insights based on the chart reading for the Nifty 50 Index.
Disclaimer: Do Manage your Risk and Money management, Do not Forget to PUT STOP LOSS.
20-1.24. Remember, this is for educational purposes only and I cannot provide financial advice.
*POI zone for call buyers:*
* *Location:* The POI zone for call buyers on your chart is roughly between 21,700 and 21,800 as of your request time. This zone represents the price range where bullish sentiment is relatively strong, potentially offering buying opportunities for call options.
* *Reasons for interest:* Call buyers might be interested in this zone for several reasons:
* *Technical support:* This zone coincides with a potential technical support level, where the price may find buyers and bounce back upward.
* *Psychological level:* 21,800 is a round number level, often attracting buying interest due to its psychological significance.
* *Continuation of uptrend:* If the uptrend continues, breaking above the POI zone could signal further momentum, potentially benefiting call buyers.
*POI zone for call sellers:*
* *Location:* The same POI zone (21,700-21,800) can also be of interest for call sellers. They might look to sell call options at this level if they:
* *Expect a pullback:* If they believe the uptrend might pause or pull back before continuing, selling calls at the POI could profit if the price falls back within the zone.
* *Collect premium:* Even if they expect the price to continue rising eventually, they might sell calls to collect the premium upfront while limiting their potential downside risk.
*POI zone for put buyers:*
* *Location:* The POI zone for put buyers lies roughly between 21,500 and 21,400 on your chart. This zone represents a potential area of bearish sentiment, offering buying opportunities for put options.
* *Reasons for interest:* Put buyers might be interested in this zone for several reasons:
* *Technical resistance:* This zone coincides with a potential technical resistance level, where the price may face selling pressure and turn lower.
* *Profit from downside:* If the price breaks below the POI zone and continues falling, put buyers can profit from the decline.
* *Hedge existing positions:* They might buy puts as a hedge for existing long positions in the Nifty 50 to protect against potential losses.
*POI zone for put sellers:*
* *Location:* Similar to calls, the same POI zone (21,500-21,400) can also be of interest for put sellers. They might look to sell put options at this level if they:
* *Expect consolidation:* If they believe the price may remain within the range, selling puts can collect premium while limiting potential upside risk.
* *Neutral or slightly bullish outlook:* They might be neutral or slightly bullish on the market but still willing to collect premium by selling puts at the POI zone.
*Remember:*
* The POI zone is a dynamic area and can shift based on changing market conditions, news events, and sentiment.
* Options trading involves significant risk. Only allocate a portion of your capital that you are comfortable losing.
* Conduct thorough research and analysis before making any trading decisions, considering factors like implied volatility, time decay, and risk management strategies.
I hope this explanation helps you understand the point of interest zone for calls and puts on the Nifty 50 chart from both buyer and seller perspectives.
BANKNIFTY Short Strangle Wed1) Wed Market is a PED(Premium eating day) - Bidirectional so short strangle works better
2) you can sell top 3 leg CE & bottom 3 legs PE
3) Green lines are safe zones
4) Usually market is range-bound from 11 - 12/1PM Major moves happend before 10 and after 1PM/ 2PM
5) so better to square off before 12PM / 1PM of conservative traders
6) SL/Exit whenever it touches a safe zone or loss goes > 3000
Open Interest Analysis with Dynamic Threshold Highlights This Open Interest (OI) Analysis indicator is tailored specifically for the Indian markets, providing insights into the NIFTY, Bank NIFTY, and SENSEX indices. By visualizing Open Interest data dynamically, this tool helps traders assess market sentiment and identify key trends or reversals in the Indian stock market. This indicator is ideal for traders and investors looking to leverage OI data to understand institutional behavior, detect potential turning points, and refine entry and exit strategies.
Key Features:
1) Comprehensive Open Interest Display:
Choose between Open Interest, Open Interest Delta (daily change in OI), OI Delta with Relative Volume (OI change adjusted by relative volume), and OI RSI (an RSI-based measure for OI) to customize how you view market sentiment across NIFTY, Bank NIFTY, and SENSEX.
2)Index-Specific Compatibility:
The indicator allows users to view OI data across NIFTY, Bank NIFTY, and SENSEX —India's most actively traded indices. By default, it displays Bank NIFTY , but traders can easily switch between indices to suit their trading focus. This multi-index approach provides a comprehensive picture of the Indian market, allowing users to analyze sector-specific sentiment and track institutional interest.
3) Dynamic Threshold-Based Highlighting:
Highlight Large OI Changes: The indicator visually highlights significant increases and decreases in OI, using fluorescent green for large increases and fluorescent red for large decreases. This makes it easy to identify unusual shifts in Open Interest that may indicate strong buying or selling activity.
Customizable Threshold Multiplier: Users can adjust the sensitivity of these highlights using a multiplier. A higher multiplier filters out smaller fluctuations, focusing only on the most significant changes in OI.
4)Advanced Color and Display Settings:
Customize colors for general uptrends and downtrends, highlight significant moves, and set index or INR as the quote currency. These options make the indicator visually adaptable, allowing users to tailor it to match their preferred chart themes.
5)Technical Analysis Tools:
EMA Smoothing: Smooth out Open Interest data with an Exponential Moving Average (EMA) to reveal longer-term OI trends and filter noise. This is particularly helpful for spotting sustained institutional interest in the market.
RSI on Open Interest: The indicator includes an RSI (Relative Strength Index) option for OI, allowing traders to gauge the momentum of Open Interest. This feature can help identify overbought or oversold conditions specific to Open Interest, providing an additional layer of analysis.
6) Visual Threshold Lines:
Display threshold lines for both positive and negative OI Delta values, acting as benchmarks for evaluating the significance of OI changes. This is particularly helpful for understanding whether OI movements are within a typical range or reflect an extraordinary event.
How to Use:
1)Identify Key Market Sentiment Shifts:
Watch for fluorescent green and red highlights to identify unusual increases or decreases in OI, which can signal strong buying or selling pressure in NIFTY, Bank NIFTY, or SENSEX.
2) Analyze Multiple Indices for Sector-Specific Insights:
Toggle between NIFTY, Bank NIFTY, and SENSEX to track how each segment is performing. Bank NIFTY, for example, may show significant OI increases during periods of heightened activity in the banking sector, while NIFTY or SENSEX may reflect broader market sentiment.
3) Confirm Entry and Exit Points with Technical Indicators:
Use the EMA on OI to observe sustained trends and the OI RSI to validate potential overbought or oversold conditions. Together, these indicators can help traders make more informed decisions about entry and exit points.
Settings Overview:
Display Options: Choose from Open Interest, Open Interest Delta, OI Delta with Relative Volume, or OI RSI for customized analysis.
Data Source Selection: Easily switch between NIFTY, Bank NIFTY, and SENSEX for a comprehensive view of Indian market sentiment.
Threshold Multiplier: Adjust to control the sensitivity of highlights for large OI changes.
Highlight Colors: Set fluorescent colors to emphasize large OI increases and decreases.
Technical Indicators: Enable or disable EMA and RSI options for enhanced trend analysis.
Example Use Cases:
Swing Traders in the Indian market can utilize this indicator to monitor large OI decreases as potential reversal signals, especially on Bank NIFTY.
Intraday Traders can look for significant OI increases highlighted in fluorescent green on the 5-minute or 15-minute timeframe to detect early signs of momentum in either direction.
Index Traders can switch between indices to analyze where institutional interest is most concentrated, helping to track broader market sentiment across NIFTY, Bank NIFTY, and SENSEX.