NIFTY Options Trading by RAJ

[healthraj]

Revisiting INFY data on how to take positions tomorrow.

First of all INFY Looks little bit Tricky now because the IV has dropped.

The MAX OI Range is at 2600-3500 also looks very dangerous because it is a very broad range. 3500 is around 15% away from current Level of 3100, which would seem possible. 2600 from 3100 means INFY need to make 500 points movement, which is also possible for INFY ..

The VOLT has come down today from 66% Yesterday to 62% today. So we have to watch the INFY IV tomorrow. Last week it was 55%.

Tomorrow we will look at the INFY data at 10 AM, 12 PM and 3 PM. We will take our positions after 3 pm tomorrow, if we feel that we have a Safe trade.

May be there is one more indicator : MAX Pain . MAX Pain of INFY is at 3050.

 

[healthraj]

Poor SBIN - Going in the Reverse way.

Have been watching SBIN for some days. The MAX OI was at 1600-1800. Today the MAX OI changed to 1500-1800. So you should see 1500 in near future. When the market is around 6100, People can try buying some naked Puts of SBIN. MAX Pain at 1650. So tomorrow or Friday should once again test 1650. If it does not move beyond 1650, then you can Trade for 1500.

Master BANKNIFTY has been Testing 10400-10500 in the last four days. But I have been telling that unless the Range broadens it should be trading within the Tight range of 10000-10500. MAX Pain still at 10000, which was Tested once again and closed around 10400. Today the MAX OI changed from 9500-10000 to 9500-11000.

So there are two opportunities for BANKNIFTY. One is to Go LONG and close around 11000. The other would be to Short around 11000.

 

[healthraj]

Some General Observation on MAX OI and Great Opportunity for Positional Traders which works 90% of the time.

The MAX OI normally gives the Trading Range or the Support and Resistance. This month I have been watching a few stocks also.

SBIN - 1600-1800
SUNPHARMA - 580-600
YESBANK 300-350

Some General Observations
1. Whenever the Support or Resistance is hit for the First time, it normally bounces back. All the three above touched Support and bounced to Resistance (Except for SBIN), which did not cross the MAX Pain.
2. If the MAX Pain is crossed then it goes and touches Support/Resistance
3. If the MAX OI is concentrated in a single Strike, then it might be a Breakout depending on the which strike. For example for SUNPHARMA, the MAX OI was at 580-600, Touched 580, went to 600. Today the MAX OI changed to 600-600 and Gave a breakout profit of 50 points.
4. Whenever the MAX OI changes and/or new MAX Pain is formed, it normally goes and tests the MAX Pain. It happened for NIFTY. Yesterday the MAX Pain changed to 5850 and today we say that the NIFTY came to 5877. Today the MAX Pain changed to 5900.

Here is a summary for NIFTY in this Series.

26-Sep - MAX OI at 5700-6000. MAX Pain at 5800. NIFTY Closed 5945. Since the MAX Pain is at 5800, Expect to move to 5800.
27-Sep - MAX OI same - MAX Pain Same - Closed at 5888
30-Sep - MAX OI same - MAX Pain Same - Closed at 5777 - Crossed MAX Pain. So should goto Support.
01-Oct - Went to 5700 SPOT and bounced back and closed at 5804 - Crossed MAX Pain - So Should go UP
03-Oct - MAX OI Changed to 5700-6100. Since MAX Pain is broken we expect to Go and Test 6100 - NF closed at 5966
04-Oct - MAX OI Same - MAX Pain Same - We expect to Go and Test 6100 - NF closed at 5957
07-Oct - MAX OI Same - MAX Pain Same - We expect to Go and Test 6100 - NF closed at 5945
08-Oct - MAX OI Same - MAX Pain changed to 5850- We expect 5850 to be tested. NIFTY Tested 5877 today. - NF closed at 5954
09-Oct - MAX OI Same - MAX Pain changed to 5900 - We expect 5900 to be tested. NIFTY Tested 5900 today and crossed 5900 and so we expect 6100- NF closed at 6053

The MAX Pain should be considered as the SPOT value.

So along with the Price Action, if one could watch the MAX OI, then one could set clear Positional Profit Targets and Direction.

In Simple Terms, going Forward, I am going to use OAT to get the Support and Resistance levels and Trade based on Price Action. I would want to Take the Trades only around the Support and Resistance (MAX OI) levels. For example it would have been ideal if I had taken the trade around 5700 and carried thus far or Taken the Trade for YESBANK at 300 or SUNPHARMA at 580. It looks theoretical but I think it should work. Let me experiment and let you know the results so that I don't have to Trade daily

 

[Cubt]

Awesome analysis. Great observation

 

[Cubt]

Raj,
As per the above observation, say if MAX OI at 5800 - 6100, its wise to short at 6100/buy at 5800.

But what if nifty started moving upwards after 6100?

 

[anup]

Raj,
As per the above observation, say if MAX OI at 5800 - 6100, its wise to short at 6100/buy at 5800.

But what if nifty started moving upwards after 6100?

Sorry for butting in.. i think along with Max OI ,Max pain also had to be considered.. Example max pain is at 5900 and current nifty is at 5850 and next day if nifty crosses 5900 then go for buy with target of 6100

 

[healthraj]

Raj,
As per the above observation, say if MAX OI at 5800 - 6100, its wise to short at 6100/buy at 5800.

But what if nifty started moving upwards after 6100?

Two scenarios possible. If moves above 6100 and the MAX OI remains at 6100, then you can be sure about the position. If let us say 6100 becomes 6200, then we can always sell at 6200. If MAX Pain is less than 6100 then we don't need the sell of 6200 also. But Yes, For positional Trades normally the stoploss might be huge.

I will take another example which happened in this month which everybody will understand, ie BANKNIFTY. for BANKNIFTY from 27-SEP to 08-OCT, the MAX OI was at 9500/9000-10000. The MAX Pain was at 10000. In the last few days you must have seen that BANKNIFTY was always bouncing off from 10000. But the MAX OI did not change. Here is another indicator. If MAX PAIN is equal to one of the MAX OI, then there is a possible breakout in the waiting. Today the MAX OI changed from 9500-10000 to 9500-11000. So as per the theory BANKNIFTY will test 11000.

It was a similar case for SUNPHARMA also. MAX OI was at 580-600. MAX Pain was at 600 and was always bouncing from 600. Today it broke out of 600. MAX PAIN changed to 610 but the MAX OI has not changed on closing basis. May be tomorrow the MAX OI for SUNPHARMA will be decided and it would create an opportunity for SHORTing.

 

[gmt900]

Some General Observation on MAX OI and Great Opportunity for Positional Traders which works 90% of the time.

The MAX OI normally gives the Trading Range or the Support and Resistance. This month I have been watching a few stocks also.

SBIN - 1600-1800
SUNPHARMA - 580-600
YESBANK 300-350

Some General Observations
1. Whenever the Support or Resistance is hit for the First time, it normally bounces back. All the three above touched Support and bounced to Resistance (Except for SBIN), which did not cross the MAX Pain.
2. If the MAX Pain is crossed then it goes and touches Support/Resistance
3. If the MAX OI is concentrated in a single Strike, then it might be a Breakout depending on the which strike. For example for SUNPHARMA, the MAX OI was at 580-600, Touched 580, went to 600. Today the MAX OI changed to 600-600 and Gave a breakout profit of 50 points.
4. Whenever the MAX OI changes and/or new MAX Pain is formed, it normally goes and tests the MAX Pain. It happened for NIFTY. Yesterday the MAX Pain changed to 5850 and today we say that the NIFTY came to 5877. Today the MAX Pain changed to 5900.

Here is a summary for NIFTY in this Series.

26-Sep - MAX OI at 5700-6000. MAX Pain at 5800. NIFTY Closed 5945. Since the MAX Pain is at 5800, Expect to move to 5800.
27-Sep - MAX OI same - MAX Pain Same - Closed at 5888
30-Sep - MAX OI same - MAX Pain Same - Closed at 5777 - Crossed MAX Pain. So should goto Support.
01-Oct - Went to 5700 SPOT and bounced back and closed at 5804 - Crossed MAX Pain - So Should go UP
03-Oct - MAX OI Changed to 5700-6100. Since MAX Pain is broken we expect to Go and Test 6100 - NF closed at 5966
04-Oct - MAX OI Same - MAX Pain Same - We expect to Go and Test 6100 - NF closed at 5957
07-Oct - MAX OI Same - MAX Pain Same - We expect to Go and Test 6100 - NF closed at 5945
08-Oct - MAX OI Same - MAX Pain changed to 5850- We expect 5850 to be tested. NIFTY Tested 5877 today. - NF closed at 5954
09-Oct - MAX OI Same - MAX Pain changed to 5900 - We expect 5900 to be tested. NIFTY Tested 5900 today and crossed 5900 and so we expect 6100- NF closed at 6053

The MAX Pain should be considered as the SPOT value.

So along with the Price Action, if one could watch the MAX OI, then one could set clear Positional Profit Targets and Direction.

In Simple Terms, going Forward, I am going to use OAT to get the Support and Resistance levels and Trade based on Price Action. I would want to Take the Trades only around the Support and Resistance (MAX OI) levels. For example it would have been ideal if I had taken the trade around 5700 and carried thus far or Taken the Trade for YESBANK at 300 or SUNPHARMA at 580. It looks theoretical but I think it should work. Let me experiment and let you know the results so that I don't have to Trade daily

Good thinking Raj!
My experience is : you make more monthly profit with less stress if you don't trade everyday.

 

[healthraj]

NIFTY Charts for Today 6min and 18min.

As promised today, I am posting the charts for NIFTY. The Charts are Self Explanatory. This is an improved version of my MTP charts which I basically developed using the SAINT's FLOW method (Of course not fully). So as per the METHOD, Take a trade as per Lower timeframe pivots (6min) and get out of the Trade when we Trend Reverses in the higher Time frame(18min).

You can also say that it is based on Price Action but I don't have to draw any lines etc.. Trade based on Colors. Green - Buy. Red - Sell.

My today's call was based on this chart

Accordingly
Buy Generated in 6min chart at 5903.
18min Chart the Trend is still on the LONG side, even though you see some Sell Signal in 6min chart.

The BUY ABOVE (Green Line) and SELL BELOW (Red Line) will keep changing based on the NIFTY movement.



6min Chart for NIFTY SPOT

18Min Chart for NIFTY Spot

 

[Option.Trader]

Yes you are right. Even the 5000PE is having 20L of OI. 5400Pe is having 41L.

With 5800 as the MAX Pain Hope we will get a positional SELL Trade around 6050 fro 250 points towards 5800. The Stoploss can be 6080, which will also help those people having Long Calls. Please do not miss this opportunity in the next week.

Also last time nifty rallied, Max pain changed from 5800 to 5900 when nifty reached 6050, so not sure if taking puts at 6050 would work. Technically beyond 5970 is smooth sailing till 6100. Just my 2re on this

Some General Observation on MAX OI and Great Opportunity for Positional Traders which works 90% of the time.

The MAX OI normally gives the Trading Range or the Support and Resistance. This month I have been watching a few stocks also.

SBIN - 1600-1800
SUNPHARMA - 580-600
YESBANK 300-350


4. Whenever the MAX OI changes and/or new MAX Pain is formed, it normally goes and tests the MAX Pain. It happened for NIFTY. Yesterday the MAX Pain changed to 5850 and today we say that the NIFTY came to 5877. Today the MAX Pain changed to 5900.

Here is a summary for NIFTY in this Series.

26-Sep - MAX OI at 5700-6000. MAX Pain at 5800. NIFTY Closed 5945. Since the MAX Pain is at 5800, Expect to move to 5800.
27-Sep - MAX OI same - MAX Pain Same - Closed at 5888
30-Sep - MAX OI same - MAX Pain Same - Closed at 5777 - Crossed MAX Pain. So should goto Support.
01-Oct - Went to 5700 SPOT and bounced back and closed at 5804 - Crossed MAX Pain - So Should go UP
03-Oct - MAX OI Changed to 5700-6100. Since MAX Pain is broken we expect to Go and Test 6100 - NF closed at 5966
04-Oct - MAX OI Same - MAX Pain Same - We expect to Go and Test 6100 - NF closed at 5957
07-Oct - MAX OI Same - MAX Pain Same - We expect to Go and Test 6100 - NF closed at 5945
08-Oct - MAX OI Same - MAX Pain changed to 5850- We expect 5850 to be tested. NIFTY Tested 5877 today. - NF closed at 5954
09-Oct - MAX OI Same - MAX Pain changed to 5900 - We expect 5900 to be tested. NIFTY Tested 5900 today and crossed 5900 and so we expect 6100- NF closed at 6053

The MAX Pain should be considered as the SPOT value.

So along with the Price Action, if one could watch the MAX OI, then one could set clear Positional Profit Targets and Direction.

Raj

Dont you think the Max pain will change to a higher level everytime Nifty breaks out... i mean in the beginning when it was at 5800, you had suggested taking positional puts at 6050, i had mentioned that the max pain could shift to 5900 when nifty moved towards 6050. So wouldn't it be a case of chasing tails... if the max pain keeps shifting, the goal posts keeps moving forward. Or is it a case that if Max pain remains @5900 when nifty does move to 6150 levels that the trade will play out?