KumarAbhilash

nifty - what does open interest says

NSE:NIFTY   Nifty 50 Index
371 23 14
Different questions are being raised. Let's take them one by one:
Q1: Open Interest table is showing huge addition in 9600PE numbers whereas 9600CE numbers have not increased by that much. So does it not mean strong base at 9600 ?
Ans: Lets look at the Open-Interest Table
https://prnt.sc/ff4edb
And understand who is defending what. The addition of 9.5 lacs number at 9600PE is at average price of 75, so these writers would be defending 9600-75 i.e 9525 and not 9600. Also the accumulative(progressive) avg             till this day for 9600PE writers is coming to 140. So in toto             , the 46.71 lacs 9600PE writers would be working to defend 9600-140=9460 and not 9600. Thus we have to get our understanding correct.
9600CE writers have accumulative(progressive) average standing at 55. So they are all defending 9600+55=9655. Thus there is much more at stake (at current juncture) for 9600CE writers and the mere fact that even at week-end they have not deserted their positions speaks of their conviction to defend this post.
Q2: Is Momentum strong enough to carry us past 9700?
Ans: Lets look at Hourly charts:

This chart shows clear divergence but break-down has not occurred yet---- so weakness in momentum is only guidance and one has to watch Hourly closings to confirm weakness and take short positions accordingly--- if break-down doesnot happen then we may continue to rise with hiccups.
So take short positions only after breakdown.
Q3: What should be our targets if break-down occurs??
Ans: With such a strong build-up by put-writers at 9600/9500/9400 strikes, I am not expecting very deep cuts. First target would be 9460 and rest would be updated as we approach that point.
Comment:
with day high as sl we can go short for 9500
Excellent in the way of logic
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Thanks for the great analysis! Just wanted to know that since this data changes intraday and even during the week, where does one draw the line and use that data for analysis. I mean which time is a reliable time?
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KumarAbhilash inderjeet05
@inderjeet05, i prefer weekly time frame as i personally believe its very hard to forecast day to day move and if someone does i personally dnt think its quite possible to make successful trade on day to day basis rather end up in buy sell and ultimately losses .its my view and i can be completely wrong
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Great Analysis!!!
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abhilash USP is clean charts and clean heart.
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@sandy, thanks sir for such a kind words.
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KumarAbhilash IyerHariharan
@IyerHariharan, sir its good no .. :P .
kidding wil be in touch
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IyerHariharan KumarAbhilash
@KumarAbhilash, hahahaha yea sure
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Will we ever see 9500 on Nifty again?
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