How to trade Nifty & Nifty Bank in new weekly series

Markets witnessed a strong one-way upmove, with both the indices seeing some spectacular moves on the upside.

Nifty’s coming week expiry option chain reflects on PE writers actively adding their positions all the way till 15,000 strikes - overall more than 30 thousand contracts each, with CE writers standing tall at 17,400/17,500 zones, with over 60 thousand contracts each.

PCR OI at 17,300 is just above 1, which is crucial to watch going ahead for the direction now.

Option Strategy recommendation:

Bull spread is recommended
Weekly expiry Buy 17,300 CE at Rs 167 and Sell 17,500 CE at Rs 75.

Bank Nifty weekly expiry option chain reflects on PE writers being active at 38,500 strike - overall 45,000 contracts, with CE writers building resistance at 40,000 strike - overall more than 50,000 contracts. The data hints on a range bound scenario for the index.

Since the immediate range is well defined in between 35,800-40,000 for the index, participating in short strangle is well suggested.

Weekly expiry: Sell 38,000 PE at Rs 115 and Sell 40,300 CE at Rs 115

Total inflow of Rs 230.. SL at Rs 175 also recommended for safe traders.

Note: Please note selling of options is high risk play, so only for traders who can understand the risk to participate.

Sectoral updates
On a weekly basis, most of the sectors saw stupendous rally, with pharma witnessing profit booking. However, metals and auto sector looks very positive going ahead and will likely outperform now.

Stock updates
NMDC: CMP Rs 133, buy on declines till Rs 128, TGT Rs 143/150, SL Rs 125.

Tata Motors: CMP Rs 412, buy on declines till Rs 400, TGT Rs 435/444, SL Rs 395.

(The author is derivatives lead analyst at Prabhudas Lilladher)