On 19th September 2019 Nifty opened at 10,845, made a high of 10,845, low of 10670 and finally closed at 10705. As expected, Nifty after breaking down its important level in its first 15 mins only followed the downtrend through the day, making it easier to trade.
Open interest wise, for the call option 11,000 still has the maximum open interest. But 10800 and 10900 have also added significant positions. On the put side 10,800 still having maximum open position despite the fact that 18% positions of 10,800 put options are reduced, indicating the low confidence level of the bulls.
Nifty short term support stands at 10600 and then 10400 while resistance is at 10,800 and 10,900.
As we can see from the daily chart of Nifty is below 200-day moving average and 50 day moving average. And the trend on daily is down. After yesterdays inside bar Nifty, as expected nifty continued its southward journey.
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 and 10750 calls have added 67% and 97% more positions ( it’s a change!!). It indicates that the market is in the firm grip of bears. On the put side, 10700 have added some positions, which indicates the market might take a breather at these levels also.
Stock Trading Strategy
- PVR : Sell at 1575-1580 with a stop loss of 1592 and target of 1540.
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