Nifty Open Interest Analysis

[SexyTrader]

As I sense it, today's game is pretty simple :thumb:

Market starts rising to build on the sentiment of the rate-cut etc and then plunge down after the excitement is over Or vice versa....! But in all this excitement, atleast 300-400 points gain in BankNifty should be up for grabs INTRADAY Thats where the fun lies!

 

[jamit_05]

Today, or max this week, is the only action the market is going to have. Then it will all be dull for the entire month of march and april. Pace will pick up only after last quarterly/annual results.

 

[Option.Trader]

Today, or max this week, is the only action the market is going to have. Then it will all be dull for the entire month of march and april. Pace will pick up only after last quarterly/annual results.

Time: 11:AM

Repo rate cut of .25.. no news of CRR cut... as it was on expected lines and already discounted by market on thursday's rally, no real upside seen... Smart money unwinding the puts taken in 5500/5600 .. alreayd 4 L shares unwound , whereas 5700/5800 still acting as support for Nifty... no unwinding seen there... so most probably nifty would continue to languish between 5800-5900 in the near term

Happy trading

 

[jamit_05]

Hi OT,

Have got into a habit of looking up the option chain for feel of the trend.

Do you agree with the following:

On the CE side, only 6000 has OI > 70 L, above it the conviction is weak. Meaning if 6000 breaks then it is strong bull on the upside.

But on the PE side, 5800, 5700, 5600, 5500 all have OI > 70L . Writers have conviction at these supports. So, breaking them won't be a one shot thing. Some major international news will be required.

The question then is: Is the Cyprus "legal scam" a news big enough? Some call it as big as Lehman as public has run to the bank to withdraw as the fear that the banks have gone broke.

5800 PE lost OI reduced by almost 15%, but 5700 holding. Fall, if at all, won't be easy till the other round figures give in too. Hence, reversal probable (mostly after Big Guys have scared the Small Guys enough to sell their stock)

Furthermore, one half of a day still to go, price will either go sideways now or reverse. Plus Asian is in green... Japan 2% Up... So reversal is still on the cards !!

 

[Option.Trader]

5800 PE lost OI reduced by almost 15%, but 5700 holding. Fall, if at all, won't be easy till the other round figures give in too. Hence, reversal probable (mostly after Big Guys have scared the Small Guys enough to sell their stock)

Furthermore, one half of a day still to go, price will either go sideways now or reverse. Plus Asian is in green... Japan 2% Up... So reversal is still on the cards !!

DMK pulling the rug under UPA coalition was the straw that broke the camel's back. 15% unwinding of 5800 does not look good, looks like bulls have lost the 5800 level battle... if 5700 unwinds today...we are going free fall to 5500 levels... Only relief is that 5800 CE has not caught up... looks like they missed writing this out..I would suggest buying OTM puts in April series on a bounce back if any

 

[anup]

Yes Option trader,market needed a trigger point for action... 0.25 Basis point cut was expected but DMK pulling out provided the downward trigger.....

 

[jamit_05]

DMK pulling the rug under UPA coalition was the straw that broke the camel's back. 15% unwinding of 5800 does not look good, looks like bulls have lost the 5800 level battle... if 5700 unwinds today...we are going free fall to 5500 levels... Only relief is that 5800 CE has not caught up... looks like they missed writing this out..I would suggest buying OTM puts in April series on a bounce back if any

Remember how big money bought major lots of 5400 PEs.... smart move... must've been someone from DMK itself :d

 

[jamit_05]

Now it is getting scary.

5600 also unwound ~15% !!
5500 have very low OI

But, 5700 holding up. However, it is breaks, then next station....

5400​

 

[SexyTrader]

But the Govt is NOT going to fall now....:thumb:

Its a game....DMK played it and now they will be wined & dined and all is well

 

[jamit_05]

But the Govt is NOT going to fall now....:thumb:

Its a game....DMK played it and now they will be wined & dined and all is well

Just one positive news and this whole sorry story could reverse.

Big boys (MFs DIIs etc) look to book profit towards end of year to show strong balance sheets. It would be bad for their business if they sell and people buy. Then they would end up buyer higher. So they want everyone to sell. Make a huge bearish scenario. Throw in some solid reason... like DMK.

Then while CNBC is giving super bearish levels making the retailers wary, calculative and risk averse in the bear market the big buys will buyback at much lower near 5400 levels.