Upside for this F&O Expiry in Nifty futures is capped at 5000 level, as nifty call options has highest open interest in 5000 strike. Hence upside in nifty futures is limited to 5000 levels at this point of time. So we would suggest traders to take short positions in nifty futures near 4978 level for targets as 4900 and then 4858 zone. Traders must keep stop loss just above 5020 level for this trade. Instead of trading nifty futures high risk traders can accumulate nifty 4900 put options near 26 level for expiry target as 42 and then 52. Stop loss for this put option must be placed at 12. As the trend in global markets are down and we have seen major selling coming in metals due to strong USD, this must bring some selling pressure in Indian equities as well. So this trade entry is valid, we are expecting some major selling in this area, this selling should pull nifty futures down to 4909 level and then 4849 level. So traders should sell on bounce, and fresh short positions can be made just near 4970 level in nifty futures. Nifty put options can also be used to limit the risk in volatile market, here high risk traders can buy nifty 4900 put options near 26 level with positional targets as 42 and then 52 levels. Risk reward ratio is quite attractive so nifty put options can be bought to take the advantage of the resistance at 5000 level in this down trend. Slow stochastic indicator can be used to time a better entry in nifty put options on 15 minutes chart. Nifty options open interest data shows that 5000 call option has highest open interest, so this can be high resistance zone, hence an extra confirmation for going short. The resistance of 5000 seems to be strong and we don’t see any positive triggers in market at this point of time and trading in the direction of the long term down trend traders must watch for selling opportunities till the trend remains down. Markets may become volatile in near term as tomorrow is F&O expiry for September series. Technical analysis suggest us market may move lower, most of the technical indicators are suggesting strong bearish momentum ahead.
Free Nifty Options Trading Strategy: Buy in small quantity, Nifty 4900 put options (September Series) near 22 level with positional targets as 42 and then 52 level. Place stop loss orders just below 10 level.