Its Time To Go Short..!!! 8400 Strike Put Option OI Spurts By 18 Lakh Contracts..!!!

    September seems to be a Long expiry, 33 days left. Whats new in September, highest Call base still remains same i.e. 9000 and Put base at 8500, suggests that range for Nifty in September might be 8500-9000. But it seems that 8500 might be breached easily as Open Interest in 8500 & 8400 Strikes is almost same. Looking at moving average support, 50 days Volume Weighted Average Price stands at 8465 & currently Nifty is below its 10 days VWAP & 20 days VWAP which is 8627 & 8632 respectively. As mentioned in my earlier post, yesterdays closing was below 8600 where 10 days VWAP has crossed 20 days VWAP on the downside meaning short term moving average crossing long term moving average on downside confirms the SELL for Nifty.

         Put-Call Ratio stands at 1.09, suggests that Puts have more open interest then Calls. 8400 Put option strike price adds 18 lakh contracts and 50 days moving average support coming at 8465 means there is still immediate downside visible. RSI is at 54 which is neutral open for  both sides. Yesterday's Cash Volumes are at its peek if we look  at last 20 days, negative move with high volumes indicates a clear bearish signal, any rise is a Selling opportunity provided 8630-40 is not crossed on closing basis. For the short side one can maintain 8635-8640 as a stop-loss. If we look at chart immediate support comes around 8500, closing below which can trigger further downside up-to 8300. 8300 should act as a very good support and even 8200 is a trend-line support of last 6 months which will be the worst case for now at-least. As we reach towards 8300 one can start building long position as Major uptrend remains intact above 8200.

Nifty Closing Below Its 10 Days Volume Weighted Average. 8700 Call Option Adds 11 Lakh Contracts....!!

    It seems that it will be difficult for Nifty to move above 8700 this expiry. As on a negative day 8700 call option open interest spurts by 11 lakh contracts, this shows crossing 8700 is now a challenge. Nifty has closed below its 10 days Volume Weighted Average Price(VWAP) which is 8640, it is very important that Nifty should not closes below its 20 days (VWAP). It will be a short term downward confirmation if it does so. 

         There is a Gap around 8323 which was made in starting of July, I think if it breaks 8600-8610 & closes below 8605-8610 then it might go down upto 8323 on the downside. Cash Volumes are again above its 10 days Average Volume, which indicates today's downside is happened with volumes & it might struggle to come above yesterday's closing which is 8667. Put-Call Ratio stands at 0.9, which has came down from 1.03 to 0.9. It is neither overbought nor oversold and can go any side. 

            So things to watch out for whether Nifty closes below 8600-8610 which will be a confirmation for downside might be up-to 8323 where there is a Gap formed in early July. On the other hand Nifty has to close above 8667 which will show the strength coming in again & probability of moving towards 8700 becomes high. 

Will Nifty Make A New 52 Week High?? Highest Call Base Shifts From 9000 Strike To 8800...!!

       No doubt Nifty has not broken its trend from the day it has reversed from 6800-7000. Month on Month it has given higher closings since March 2016. July expiry close was at 8666, will Nifty be able to sustain above it & give a new high closing is a question arising while looking at data. Nifty 8600 strike Put option open interest seen a addition of 10 lakh contracts not only this on the other side 8600 strike Call option open interest seen reduction of 9 lakh contracts. And it is not a shift of OI from 8600 to higher levels, all the strike prices upto 9100 has seen reduction in OI. And 8800 Strike is now the highest call base which was 9000 previously, which indicates 8800 will act as a very strong hurdle even if it moves higher.

     Yesterday's closing was exactly at 8624 which was a 10 day Volume Weighted Average Price as mentioned in my earlier post. Actually it has taken support we can say as it has moved higher today. So as it is close to its 52 week high, sustaining at this level for longer time will definitely trigger higher levels.  Next week is expiry and we might see a lot of action in expiry week, if it fails to make a new 52 week high & closes below its 10 days VWAP(Volume Weighted Average Price), we may see 10 VWAP crossing 20 VWAP on downside which will be not a good sign for at least short term. On the other hand if it breaks & makes a new 52 week high will confirm & opens doors for higher levels in next expiry. RSI at 53 does not suggest any sign of overbought, room is definitely there to move higher provided it is not closing below its 10 days VWAP. 

                           So things to watch out is whether NIfty is making new 52 week High which indicates to be on the long side or closing below 8625-8630 levels which will be a short term downside. 8610-8630 are the important levels for short term to watch out. Cash Volumes are consistently on & above its 10 days average volume from last almost 10 days now. 

Premium Sheds 20 Points & Open Interest Is Negative, While Nifty Moves Higher!!! Is It a Sign Of Weakness??

While Nifty moves almost 1% from previous close, indicators showing different picture. Cash volumes are above 10 days average volume, premium in futures contract sheds 20 points, open interest in call options is negative meaning showing closing of contracts & Put-Call ratio now stands at 1.02 which is still not a concern but other indications are indicating a negative move soon. 

 Where Nifty is moving towards its expiry? 8500 seems a very strong base now for short term at-least above which there is not much concern. 10 days Volume weighted average is at 8624 & 20 days Volume weighted average is at 8599, both moving averages are very close the moment 10 days VWAP crosses 20 days VWAP its time to close long position or at-least book your profits. Below which weakness may continue up-to 8500 zone. For now it suggests Expiry could be around 8500-8600 range. Because in Put option side 8600 Put options has witnessed highest addition while 8400 Put option witnessed subtraction which suggests for this expiry 8400 is a very less probability for now. 50 days Volume weighted average is at 8389 very close to 8400.

      So we have to  keep an eye on 8624 & 8599, in my previous report I have suggested that any rally towards 8700 should be used to short the market. For now below 8624 & 8599 one can short keeping reasonable stop-loss above 8624. 

Divergence in Nifty Movement & Its Indicators!!. Cash volume increasing with decrease in price.

There is a clear divergence seen in MACD, RSI as Nifty moved higher from 8300 to 8600 while the indicators showing negative divergence which suggests this will correct soon around 8300. A rally towards 8600-8700 should be used as a opportunity to short the Market. On the other hand cash volumes are higher above its 10 days average volume & Nifty is coming down which suggest Market participants are selling their deliveries & booking profits. 8541 is now a 20 days volume weighted average below which there is support coming on 8304 which is 50 days volume weighted average. 

Open interest in Call Options at 8700 strike to 9000 strike has gone up substantially, which suggests even if Nifty tries to go higher from here there will be hurdles at each level. On the Put Options side at 8300 highest addition was seen of 6 lakhs contracts, but 8500 is still highest Put base for August series. So the Crucial level is 8500 to watch out. Since the sentiments are positive every dip is bought in, so 8300 might be a fair entry level for next leg of up-move.