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  • Aug 23, 2022 - Options Writers Should Grab the Opportunity in the Nifty this Week

Options Writers Should Grab the Opportunity in the Nifty this Week

Aug 23, 2022

After a stellar rally in the Nifty 50 index from 15,183 levels to nearly 18,000 levels in just 43 trading days, the last couple of days have been dreadful for bulls.

The Nifty 50 index from the high of 17,992 on Friday, hit a low of 17,345 today, a fall of over 600 points in over two trading days.

The Sensex also fell below 59,000 after hitting 60,000-mark last week.

That's the expiry volatility folks!

A range-bound expiry

Technically, the reversal has halted at 23.60% Fibonacci retracement from 15,183 to 17,992 at the 17,329 mark.

Historically, index retraces 23.60% to 38.20% after the sharp rise and consolidates for few trading sessions.

Equitymaster proprietary TruStop (TM) system indicates the index is likely to consolidate between the two averages marked on the chart below.

Nifty 50 Index Technical Chart


Relative strength index (RSI) in the lower panel is trending in the oversold zone. But I'm a believer of divergence in the oversold zone which is yet to be seen for confirmation.

The bulls and bears would battle between 17,189-17,675. This is the best time for options writers to grab the opportunity.

Writers should avoid positions if it breaks out of range. Also, keep a watch on the India VIX. A move above 21 can prove to be risky.

As I write this, the SGX Nifty live index is down 56 points at around 17,430 levels.

Meanwhile, the Nifty is trading at around 17,415, down 74 points. Eicher Motors and Bajaj Finserv are the top gainers today. While Adani Ports and Infosys are the laggards.

If you're interested in being part of my charting journey as I share how to create wealth from the profitable trade setups, join my telegram channel - Fast Profits Daily. You'll get access to the best trading ideas in the stock market.

To know more about how the Nifty and Bank Nifty index are performing, please see the NSE Nifty Live Chart and NSE Bank Nifty long term chart.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Brijesh Bhatia

Brijesh Bhatia Research Analyst and expert chartist, is the editor of Alpha Wave Profits. Fully committed to his craft, Brijesh has mastered the art of making money by trading using technical analysis. Brijesh has an MBA from ICFAI and 16 years of experience in India's financial markets. He began his career on Dalal Street as commodities dealer and it wasn't long before he developed his own unique trading system. Brijesh worked on his trading system until it could be expected to deliver 5 units of return for every unit of risk.

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