Market was highly volatile on 22 October as it was excepted , mentioned in the last blog post and reason was simple fear on upper level. due to various factor one should must read the previous post it has lot of learning points.
Now what next ?
Nifty closed at 11896.45 , it was managed to close around 11900 which is good as it is almost near to its pivot point. So we have to look today whether it trades above from this level or below.
Possibility of continuation of rangebound around 11,850-11,950 is very high.
First resistance placed at 11976 for any upside confirmation or if it breaches 11860 which is also its first support will be bearish confirmation.
This week is going to be very volatile again.
SGX nifty today opened positive which is indicating positive opening for nifty.
As we are keep saying from last couple of days that over all data is positive that is why buyer dominating the market bears are trying to drag but they are not succeeding.
Only hurdle for the market is news around and election in US so one should be very cautious and trade as per market movement and not with any confirmed trend in mind.
Lets talk about the data what they suggest :
FII's are buying continuously and it is one of the major reason nifty is recovering on every fall or correction is happening in the market.
They are keeping nifty balanced so one should also go with their view as they are buying on all dips.
Until FII are supporting market will trade between 11800 to 11950 or higher.
FII's positivity is good for market as if US election goes well then we will see nifty above 12250 soon.
Now lets check other area what they have do so that we can decide possible movement for tomorrow
FII sold in index Future & Option and also sold in stock future. Which indicating fall. So any upside movement will be an opportunity to sell on rise.
What option chain is telling lets look at :
Call option analysis
Heavy short buildup at 12000 strike price which means it is going to tough level for nifty to break.
Not only 12000 all upper levels short build can be seen. which suggest strong bearish view among writers .
Put Option Analysis:
Heavy short buildup at 11800 strike price which will act as strong support for nifty because it is noticeable that traders aggressively created longs position we can see long build up on 11950 and above level which clearly mean traders are heaving strong bearish view.
Call and put both side traders are having bearish view so ideally market should respect their view.
Bottom line is sell on rise strategy will be preferable for today trading session.
Over all market participants are positive for the month till now, But that does not mean market will not fall it is just they are supporting bull run, until they become bearish we will see both side movement and if they start booking profit and changed their view to bearish means free fall and nifty can even go below 11500 or 11300 level.
This week is going to be very crucial as next wave of lock down play very big role and that can impact all big participant mood.