Please read this as continuation of earlier post published yesterday. The chart is of NIFTY! Yes, that is deliberate because I want to corelate NIFTY move with BNF (Bank Nifty) move. Also after that I will talk about option chain analysis of BNF & NIFTY. NIFTY is at 11870, A good Resistance (R1, on Chart) is somewhere around 11,960 (i.e. 90 points above CMP) and a good support is at 11,780 (S2 on chart), 90 points below CMP. Now if we look at margin its almost 1/3rd of 300- exact margin between Bank Nifty's CMP and its resistances! What does it infer? It simply means that if Nifty climbs by 90 points (or falls by 90 points) then it is very likely (please understand, not compulsory but highly probable) that BNF also climbs by 300 points (or fall by 300 points). OK? so when both indices reach at same time at its resistance (or supports), the fall (or rise) will be more definite and quicker, i.e. you get your targets faster! This in nutshell means that if we try to take trade when Nifty and BNF both encounter Resistance and Support at the same time, the chances of trade going successful are not only more but much faster!
Now for option chain analysis- At 31000 strike (CMP 31066), the total OI CALL is 2,71,780 and OI PUT is 2,26,400. Not much, and not conclusive either. If we add total OI CALL from 31000 to 31500 (ATM & OTM) strikes, the figure is at 15,39,280 contracts. And if we add total OI PUT from 31100 to 30500 (ATM & OTM), the figure is at 13,67,140. Again not much difference. Now lets go microscopic- If we see total OI PUT on strikes 31500 to31700 (our support area), the figure is at 8,26,580 contracts and fresh PUT writing on Friday comes at 4,55,860 contracts. This is good. On the other hand, Total OI CALL on strikes 31300 to 31500 (our resistances) adds up to 9,49,840 and fresh CALL writing adds up to 1,73,540. This also makes sense. So there is enough build up at our support and resistance areas to back up our earlier found levels for taking trades. That's it for now. Already a very length post. Happy trading and All the best!
Now for option chain analysis- At 31000 strike (CMP 31066), the total OI CALL is 2,71,780 and OI PUT is 2,26,400. Not much, and not conclusive either. If we add total OI CALL from 31000 to 31500 (ATM & OTM) strikes, the figure is at 15,39,280 contracts. And if we add total OI PUT from 31100 to 30500 (ATM & OTM), the figure is at 13,67,140. Again not much difference. Now lets go microscopic- If we see total OI PUT on strikes 31500 to31700 (our support area), the figure is at 8,26,580 contracts and fresh PUT writing on Friday comes at 4,55,860 contracts. This is good. On the other hand, Total OI CALL on strikes 31300 to 31500 (our resistances) adds up to 9,49,840 and fresh CALL writing adds up to 1,73,540. This also makes sense. So there is enough build up at our support and resistance areas to back up our earlier found levels for taking trades. That's it for now. Already a very length post. Happy trading and All the best!