Nifty has bounced off from the above supply turned demand zone and then closed below this zone.
As observed, the price took a stop at 3.618 retracement of ABCD pattern. But looking at the DJI index, nifty is likely to open with a gap down.
Here, 17400,17300, and 17200 have a good OI on the put side, meaning they are good supports. This has to be interpreted in the right way.
1) For the 17400 put writers exit, there will be a bounce if the market opens with a gap down.
2)If the price breaks the 17300 level, long unwinding could take the price near the demand zone but shall have already broken the trendline.
3) There will be an exit way for 17300 put writers as well. The price may bounce from the demand zone for their exit.
4) After breaking this zone, the price may come to test the 17200 level which is also has a huge OI on the put side. The fall could be up to 17120 if this level is broken.
5) As the volatility is high, expect the market to move violently. But get the swings right for good profits and be patient for the right entries.
All the other data is mentioned on the chart.
Happy trading :)
This is just for educational purposes.
As observed, the price took a stop at 3.618 retracement of ABCD pattern. But looking at the DJI index, nifty is likely to open with a gap down.
Here, 17400,17300, and 17200 have a good OI on the put side, meaning they are good supports. This has to be interpreted in the right way.
1) For the 17400 put writers exit, there will be a bounce if the market opens with a gap down.
2)If the price breaks the 17300 level, long unwinding could take the price near the demand zone but shall have already broken the trendline.
3) There will be an exit way for 17300 put writers as well. The price may bounce from the demand zone for their exit.
4) After breaking this zone, the price may come to test the 17200 level which is also has a huge OI on the put side. The fall could be up to 17120 if this level is broken.
5) As the volatility is high, expect the market to move violently. But get the swings right for good profits and be patient for the right entries.
All the other data is mentioned on the chart.
Happy trading :)
This is just for educational purposes.
Trade closed manually:
This recovery is expected but not so soon. Not a safe environment to carry short positions.