August 16, 2020

Nifty Weekly Overview of 20th August 2020 Expiry

By Roy

Last week as I mentioned in my post, Nifty was unable to break 11500 on the upper side. It did not get any support of Banking heavy-weight names and the rally was short-lived. My strategy to sell the 11500 call and 10700 put yielded me a return of 1.58% in 6 days.

You can go through my previous week post

Let us analyse how this week expiry shapes up for us.

Nifty Daily:

I think Nifty is likely to trade with a negative bias. It was unable to break the range with convincing volume. The downside till 10900 seems a possibility. On the upside 11400 will be resistance zone. 27 lakh call writers are standing at 11300 and 24 lakh call writers are at 11400. So market may be factoring in a bearish move. Vix has moved slightly up at 21.67. I guess there is a short built up in market.

The story with Bank Nifty remains the same. It lacks the strength.

A strong support is at 21000, it may retrace up to that level during this week. Without the leadership from Bank Nifty, Nifty won’t be able to take out those strong resistance levels on the upside.

The Old Story Goes Begging:

Last week I mentioned about the tryst with 12000. Nifty Pharma again fell-off from that cliff. 12000 acts like a old one sided love story where the girl  kept on rejecting Nifty Pharma.

Hopefully one fine day Nifty Pharma will be able to woo that girl and cross that 12000 mark with some conviction.

Weekly Expiry Strategy:

I have sold 10700 Put option of Nifty at 18.60 and Sold 11600 Call option of Nifty at 7.35. Both for 20th August, 2020 expiry. I sold this strangle on Friday.

Disclaimer: This is not a buy or sell recommendation. I am not a SEBI registered advisor. I sell options and quite aware of the risk associated with it. I have kept surplus funds for any adjustment that may be needed due to evolving market conditions. This post is only an information not a recommendation.