Nifty Open Interest Analysis

[Option.Trader]

we'll switch to trying to play out some trades ...as always crowd sourcing is always solicited to make this a success.. just picking up from what i said in diff thread

Positives
1) Commodity cycle seems to have played out with Gold recovering 4%
2) Rate cut seems to be factored in
Negatives
1) Corruption scandals refuses to die down
2) Earnings from companies look to be lacklustre
3) India story looks to be played out till elections are over

So the probability of Nifty hitting the top of 5970 seems to be more likely and hence the trade on downside going forward looks more rewarding

As day traders we could look at buying on dips till May 3rd and switch to short positions a day before or on the rate cut day

So for coming week... buy on dips 5900 CE and sell 6000CE when nifty approaches 5970 with a Sl of 20 points for both the trades

On May 3rd start accumulating either Puts or sell 6000CE whichever you are comfortable doing.. lets track it day by day

 

[timepass]

On May 3rd start accumulating either Puts or sell 6000CE whichever you are comfortable doing.. lets track it day by day

I would rather not second-guess the RBI and stay out at the end of the next week. One never knows which way the cat may jump. Or maybe the daring ones will buy an out of money strangle or hedge it. I will definitely not have any positions before the RBI policy announcement.

 

[jamit_05]

I would rather not second-guess the RBI and stay out at the end of the next week. One never knows which way the cat may jump. Or maybe the daring ones will buy an out of money strangle or hedge it. I will definitely not have any positions before the RBI policy announcement.

I agree. It is always best to not second guess Mr.Market.

Point is. Market has moved up too much and too fast. So it is too late to consider taking any longs. And since momentum is strong it is too early to take any shorts.

I intend to take short entries, but will wait for market to show some reversal on the daily chart.

Spot may have not reached the strong resistance (double top) of 5971, but May Futures already have tailed it

 

[sridhar]

I agree. It is always best to not second guess Mr.Market.
Spot may have not reached the strong resistance (double top) of 5971, but May Futures already have tailed it

Just an observation of mine for consideration:
I have always been looking at daily chart levels considering the Near Month Nifty charts. My logic is that I trade in future related options & the premium difference wrt spot possibly is significant. Till now all the strong Nifty-F1 daily levels have been respected by the market ( tracking from DEC'12.).

 

[jamit_05]

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[Option.Trader]

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I like the idea, let's team up and track our commitments, we each choose among options futures and spot for one month with logic and see how it goes. Refrain from criticism, only support to improve

 

[niftytaurus]

hi
I am a new trader..but from last some weeks I have been reading this thread,which is informative...& I am also trying to understand it..I am a directional trader...as much as i learned till now...I am concentrating on nifty chart....
5940-5970 would be a short time resistance for it... fii might try to take it from that level till 3 may as to get as much profit as they can get...
3 may is really crucial...but banks already have discounted that rate cut in previous months
I have seen charts some of the banks...but in previous history that never show continuous 8-10 days bull ride..i.e continuous green candels....for such a long period
that rally took momentum very fast...its likely that they fall with greater speed
prices are air up from 20 dma ...
I just try to interpret objectively...as my knowledge is limited..im learning nw...senior members can give better view

 

[jamit_05]

I like the idea, let's team up and track our commitments, we each choose among options futures and spot for one month with logic and see how it goes. Refrain from criticism, only support to improve

Am already posting my positional trades...

 

[sridhar]

Seeing the PE series charts for various strikes- both ATM, OTM & ITM I get a feeling that the prices of the PE options were in a secular decline and are now flattening out. Similar strike CE prices are showing a flattening out after secular rise. So possibly a medium term trend reversal may be on the cards. Alternatively it could be a distribution phase before the up-move resumes.

Any comments?

 

[Option.Trader]

Seeing the PE series charts for various strikes- both ATM, OTM & ITM I get a feeling that the prices of the PE options were in a secular decline and are now flattening out. Similar strike CE prices are showing a flattening out after secular rise. So possibly a medium term trend reversal may be on the cards. Alternatively it could be a distribution phase before the up-move resumes.

Any comments?

Cant say for sure seeing only option prices as it is a factor of time. Especially in the first week, too much time premium in Indian options to really give any interpretations... more of buy on rumor sell on news kind of set up... it may well be that people are selling 5900 CE until 5970 breaks... even 6000CE looks to be going in that direction.