Weekly Strategy, November Week 1 | Stocks and Commodities

Weekly Strategy: Sell Bank Nifty 10000 Put option and 13000 Call option.

1. Volatility index is around 19 and which is low compared to Volatility levels in the last two months.
2. Nifty is expected to move sideways and that is reflected in option prices.
3. Option premiums are very low.
4. So it is not worth selling options in Nifty at this point of time.
5. So we are suggesting selling options in Bank Nifty as Bank Nifty volatility is higher.
6. Bank Nifty volatility is higher due to the huge out performance of PSU Banks in the last few days.
7. Next week correction is expected in Nifty.
8. Even then until PNB and SBI declare their results, PSU Banks will hold the Bank Nifty.
9. So Bank Nifty will not fall much from here even if Nifty falls.
10. One reason for that is thje huge out performance of Nifty over the Bank Nifty in the last few months.
11. In May, Bank Nifty was trading 13000 plus when Nifty was below all time high.
12. Now Nifty is aroung all time high, Bank Nifty is trading more than 15% lower.
13. So Bank Nifty will not fall below 10000.
14. FII buying is slowing down.
15. So either markets should correct or move in sideways.
16. Markets moving up significantly higher from here is difficult.
17. So Bank Nifty moving beyond 13000 is also very difficult.
18. Hence we suggest this strategy of selling both 10000 Put and 13000 Call which are closed at Rs 24.45 and Rs 30 respectively.

NOTE: As I am going to Singapore, From next Monday to the following Monday, our reports may not be regular. We will try to do our best.