Will all retail traders and investors get trapped here?
The Nifty Index has significantly corrected from its all time high of 18604. In the past couple of months and trading sessions the Nifty Index has fallen from 18604 to a low of 16410. It has broken some crucial support levels on its way. There is a trap DZ located around 16350 - 16140 odd levels.
Will this be the level where most retail traders and investors will get trapped and market may show a potential turning point. A bear trap level is a level on the chart where all the bearish traders get trapped expecting the price to go lower but the price turns in the opposite direction...
The weekly open interest is suggesting that market will try to remain range bound between 16000 and 17000 levels until this week's expiry. The trap level is lining up closer to the 16k level where we see Put writers not expecting the price to go below 16k levels. It will be interesting to see how the market holds for this week and if the trap level gives a significant bounce from the Demand Zone...
More to follow on this key level in the coming days. The options volatality is very high so it will be ideal to plan credit spreads to protect downside risk if someone is interested to plan a bullish strategy around this level...
Will this be the level where most retail traders and investors will get trapped and market may show a potential turning point. A bear trap level is a level on the chart where all the bearish traders get trapped expecting the price to go lower but the price turns in the opposite direction...
The weekly open interest is suggesting that market will try to remain range bound between 16000 and 17000 levels until this week's expiry. The trap level is lining up closer to the 16k level where we see Put writers not expecting the price to go below 16k levels. It will be interesting to see how the market holds for this week and if the trap level gives a significant bounce from the Demand Zone...
More to follow on this key level in the coming days. The options volatality is very high so it will be ideal to plan credit spreads to protect downside risk if someone is interested to plan a bullish strategy around this level...
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The Nifty today has given a very strong gap up opening and is continue to move up further. The fact that the price came all the way down and today the market gapped up indicates how the big players are moving their money in the market. This is a fantastic example to learn from for all the aspiring traders. The concept of traps is key to understand via this example...