NIFTY traded in a range between 9400 and 8900 levels last week. Below are the points taken into consideration for analysis and you can find summary in the bottom.
- NIFTY is consolidating and trading between 8800 and 9400 in last two weeks.
- NIFTY is facing Resistance in the zone of 9300 and 9400;
- NIFTY trading just above 20 days EMA.
- PUT CALL RATIO (PCR) for 30th April monthly series came down to 1.08 from 1.25 last week. Though more PUTs are sold compared to CALLs overall, drop in PCR indicates that more CALLs sold compared to PUTs last week as market consolidated and couldn’t cross above 9400 level.
- Maxpain dropped to 9100 from 9250 levels last week.
- OI for April monthly series is high at 9500 followed by 10000 strikes for CALL options. For PUT options 9000 strike has highest OI followed by 8000 and 8500 strikes. However, there is drop in change in OI for 9000 PUT strike and at the same change in OI increase for 9500 and 10000 CALL options.
- Volatility index (India VIX) dropped to 39, which indicates markets are trying to stabilize compared to March month peek volatility.
Taking all the above points into consideration NIFTY is likely to close between 8500 and 9500 by 30th April expiry, so selling OPTIONS outside this range seems to be relatively safe. If NIFTY closes above 9400 with good volume then 9500 CALL options will be under pressure and you got to quickly adjust your positions accordingly. This week is 4 day trading week as markets are closed on 1st May. There are no Macro level data expected this week. Markets will track news around Corona and any Stimulus package announced by PM or FM this week. Markets will certainly follow global markets as well.
NIFTY should break above 9400 with good volume to continue its Uptrend upto 9500 and 10000 levels. Close below 8800 will change short term direction to Down Trend. As always, Market is supreme so trade with hedge and you have manage your positions as i have taught in case of any major changes in the direction of the market. Adjustment or Management of your positions is key for consistent profits.
Disclaimer: Above analysis is for educational purpose only and not a trading recommendation. Do your own analysis before taking any trades.
