Options Trading Analysis [29 May 2025]: NIFTY Trade Setup

Losses aren’t just setbacks — they’re signals.
After taking a –3.74% hit last week, I’ve reassessed my approach and refined my options trading analysis (strategy) for the 29 May 2025 NIFTY expiry.

This week, I’m prioritizing capital protection and high-probability setups. My plan involves deploying a wider Iron Condor — giving more breathing space on both sides — so that I can stay safer even in volatile conditions. The goal: reduce risk exposure and rebuild confidence with consistent, smaller gains.

In this post, I’ll walk you through:

• NIFTY’s current market structure and sentiment
• Strike selection logic using OI, PCR, IV, and trend analysis
• My full trade setup with defined breakevens and exit plan

Let’s trade with clarity, not compulsion — and this time, with a wider safety net.

Step 1: Define Market Outlook

Long-Term Trend

EMA Position:

• The current price is trading well above the 20 EMA, indicating strong bullish momentum.

Trend Pattern:

• You can observe a consistent pattern of Higher Highs and Higher Lows for the past several weeks.
• This confirms a clear uptrend.

Latest Candle Insight:

• The most recent weekly candle is a strong green candle, indicating continued buying interest.
• There is no sign of trend reversal or exhaustion yet.

Price Action:

• NIFTY has broken out of previous consolidation zones.
• This is a bullish breakout, and if it sustains, it can trigger further upside.

Final Long Term View: bullish/Uptrend

Medium-Term Trend

Price vs 20 EMA:

• Current Price: ₹24,853.15
• 20 EMA: ₹24,505.34
  👉 The price is clearly above the 20 EMA, which is a bullish signal.

RSI (Relative Strength Index):

• RSI Value: 59.33
  👉 RSI is above 50, indicating positive momentum.
  👉 RSI is not in overbought territory yet (over 70), so there’s still room for upward movement.

Price Action & Candlestick Behavior:

• Recent candles show consolidation with a mild bullish bias.
• The price is forming higher lows, signaling buying strength even during intraday dips.

Final Medium Term Trend View: Bullish/ Trending Upwards

Short-Term Trend

• ✅ The price is currently above the 20 EMA, indicating short-term bullish momentum.
• ✅ Recent candles are forming higher lows, showing strength from buyers.
• ✅ No signs of breakdown or bearish engulfing patterns.
• ✅ A slight sideways consolidation, but with supportive EMA.

Short-Term Trend View: Mildly Bullish / Consolidating Above EMA

Step 2: Identify Support & Resistance

• NIFTY is trading in the upper zone, close to Resistance 1 (₹25,070).
• If price breaks above ₹25,070, it may test ₹26,293 — a major swing level.
• On the downside, the zone ₹24,420–₹24,008 remains a critical support range.
• The unfilled gap from ₹22,900 to ₹21,758 may act as a long-term support zone in case of sudden bearish sentiment.

This clean structure helps define your Iron Condor or Credit Spread range.

Step3: OI Analysis

• ATM Strike: 24,850
• Call LTP @ ATM: ₹221.30 (IV: 15.63%)
• Put LTP @ ATM: ₹184.30 (IV: 16.17%)

• A PCR > 1 usually indicates bullish sentiment, as traders are writing more puts than calls.
• In this case, the ratio is just above 1, suggesting the market is slightly bullish but not overly confident.

Conclusion from OI Analysis:

• Strong support seen at 24,800 (high Put addition)
• Heavy resistance around 25,800–26,000 zone
• Traders are expecting the market to consolidate between 24,800 and 25,800

This gives us a good range to plan a neutral or slightly bullish strategy like an Iron Condor or Bull Put Spread.

Step 4: Volatility & Premium Analysis

Implied Volatility (IV) Trend (from your ATM Strike Observation):

• ATM Strike (24850):
  • Call IV: 15.63%
  • Put IV: 16.17%
• Verdict: IV is moderate (between 15%–20%), which is ideal for non-directional trades like Iron Condors or Credit Spreads.

Premiums for Key Strikes

What This Means:

• Premiums are high, especially on puts, which is often a sign of recent down-moves, fear, or hedging.
• The Put premiums are higher than Call premiums even though the market is near all-time highs — suggesting hedging or fear of correction.

Step 5: Nifty Trade Setup (Neostox Paper Trading Platform)

Assumptions:

• Lot Size: 75 (NIFTY)
• Use Capital: ₹8–₹10 lakhs (≈ 30% of portfolio)
• Safer Bias: Wider breakeven buffer, High probability of profit
• ATM Strike: 24,850 (Current NIFTY Level)

💰 Total Net Premium Collected:

• Call Side: ₹4,950 − ₹2,250 = ₹2,700
• Put Side: ₹10,650 − ₹7,500 = ₹3,150
• ✅ Total: ₹5,850

🔐 Breakeven Range (Approx):

• Upper Breakeven: 25800 + (₹39) ≈ 25839
• Lower Breakeven: 24000 − (₹39) ≈ 23961

📊 That’s a ~870 point safe zone (between 23961 and 25839) — excellent for low-risk setup.

💼 Capital Used (Post-Hedge):

• Approx margin per side: ₹1.8–₹2.2 lakh
• Total Capital Used: ~₹4–4.5 lakh

🎯 Profit of ₹5,850 on ₹4.5 lakh = ~1.3% return in 1 week, with very high safety

Review after Expiry

Read this article after expiry of the week, i.e., 29 May 2025.

Final Notes for Readers

This article is part of my weekly option-selling series using real-time paper trading. I follow a systematic approach with clear logic and discipline. If you want to master selling options, follow (this is not a recommendation) this journey weekly and try replicating it on paper. Once confident, you can shift to real trades!

Let me know your thoughts in the comments! Share your trades or doubts below!

Follow my journey. Learn. Practice. Profit.

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