Context and current trend
Monday 1 PM candle was strong selling move from 15770. But it could not break the low of Friday. Today when NIFTY gapped up again right above this selling, it was clear that the selling candle is negated. The additional confirmation came with small trap below the opening range.
Then NIFTY closed near high of the day. VIX dropped 2.85%.
Anticipating Wednesday
1. Wednesday can be a good trending day on upside, either close near or above 15880 possible.
2. The other possibility is pullback and consolidation which won't break the positive structure as long as its trading above the recent breakout point of 15750.
Open Interest Data
Today's up move was supported by Shorting Puts and Unwinding calls at strikes from 15600 to 15850. This now puts NIFTY in a neutral zone where it is free from downward bias.
Trade Plan for Wednesday
1. If NIFTY opens in range 15730 to 15820, that’s a large range, only trade possible is to buy the dip.
2. If NIFTY opens above 15820 but below 15840, no action is required unless it crosses 15850 with retest.
3. If NIFTY opens above 15840 but below 15880, its very strong opening, but will be difficult to trade because of multiple resistance overhead. No shorts
4. If opens below 15750, it could be again consolidating. And better to avoid as volatile movements possible
5. If opens below 15710 Wait for price action, but the positive bias is negated and need to wait for good opportunity.
Possible Trades
1 or 2, once NIFTY sustains above 15850, positional long can be considered for the next week expiry. 15900/16000 CE Spread.
Intraday trade on positive side with SL of 15750.
Happy trading
Monday 1 PM candle was strong selling move from 15770. But it could not break the low of Friday. Today when NIFTY gapped up again right above this selling, it was clear that the selling candle is negated. The additional confirmation came with small trap below the opening range.
Then NIFTY closed near high of the day. VIX dropped 2.85%.
Anticipating Wednesday
1. Wednesday can be a good trending day on upside, either close near or above 15880 possible.
2. The other possibility is pullback and consolidation which won't break the positive structure as long as its trading above the recent breakout point of 15750.
Open Interest Data
Today's up move was supported by Shorting Puts and Unwinding calls at strikes from 15600 to 15850. This now puts NIFTY in a neutral zone where it is free from downward bias.
Trade Plan for Wednesday
1. If NIFTY opens in range 15730 to 15820, that’s a large range, only trade possible is to buy the dip.
2. If NIFTY opens above 15820 but below 15840, no action is required unless it crosses 15850 with retest.
3. If NIFTY opens above 15840 but below 15880, its very strong opening, but will be difficult to trade because of multiple resistance overhead. No shorts
4. If opens below 15750, it could be again consolidating. And better to avoid as volatile movements possible
5. If opens below 15710 Wait for price action, but the positive bias is negated and need to wait for good opportunity.
Possible Trades
1 or 2, once NIFTY sustains above 15850, positional long can be considered for the next week expiry. 15900/16000 CE Spread.
Intraday trade on positive side with SL of 15750.
Happy trading