Monday, 22 August 2016

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. 

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