On 18th September 2019 Nifty opened at 10,872, made a high of 10,885 low of 10804 and finally closed at 10840. After opening gap-up, the market could not sustain at higher levels and sell-off came which took nifty close to 10800 and finally moving up again to settle at 10840.
Open interest wise, nothing dramatic has changed in Nifty. Maximum call open interest for the current month series is at 11,000 level, while maximum put open interest stands at 10800. So these levels become a logical range for the market in the short term. Though aggressive call writing was also seen at 10,950 levels, indicating a capped upside.
Nifty short term support stands at 10800 and then 10600 while resistance is at 10,950 and 11,000.
As we can see from the daily chart of Nifty is below the 200-day moving average and 50 days moving average. And the trend on daily is sideways to down. After breaking down the trendline Nifty today saw an “Inside day” , which means resumption of a downtrend can continue.
In the hourly chart, once nifty breaks the rising trendline, it can start falling faster
Open Interest Analysis of Nifty
If we analyze the open interest data of Nifty, it supports our view of short bias.
From the graph of open interest, it is clear that 10,800 is still very crucial from options point of view, though 10850 call and put writing happening ahead of weekly expiry.
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