As expected and mentioned yesterday the markets were weak today with Bank Nifty outperforming the Nifty. I have sold Nifty 11,200 CE and 10,500 PE today with a combined premium of Rs. 118. Presently, I am not using a stop loss for this trade and would be cautious if it moves beyond 150 (32 points) and am looking for a profit of Rs. 50 atleast.
I expect the markets to remain range bound from here on with a negative bias. With time I will look at exiting the current Call sold and sell lower Nifty calls if market moves lower. I firmly believe that the Bank Nifty will continue to provide the direction to the markets and any weakness in the Bank Nifty will be a huge negative for the markets. Currently, the fall has been cushioned due to the support of Bank Nifty.
I will look out for weakness in Bank Nifty and will look for shorting opportunities there to decide on the course of action on Nifty. Technically Nifty is in vulnerable territory.