The Max Pain of Options for Nifty is near 6100 right now, and there are high chances that expiry might be near 6100.
However, one counter argument is the PCR at 6200 strike price.
This PCR rose steadily yesterday from a low of 0.3 to 0.78.
As seen in the chart, there is a resistance from a double top near 1-1.1 (black line).
If this resistance is crossed by the PCR, the 6200 CE has 100-105 as a target which gives an expiry near 6300.
How to trade this?
Nifty is now overbought on hourly charts, and there is strong chance that it will correct.
On a strong open today, one can buy a 6300 PE near 70-80, with a stop loss 10 points below morning low.
If and when Nifty declines, this PE will rise fast, and can even go to 120-140.
If, during this time, the 6200 PCR is still showing strength, one can then buy a 6200 CE on dip below 20 (54 now). Partial profit booking in the 6300 PE will ensure that this 6200 CE will be free of cost.
Chart of 6200 CE:
However, one counter argument is the PCR at 6200 strike price.
This PCR rose steadily yesterday from a low of 0.3 to 0.78.
As seen in the chart, there is a resistance from a double top near 1-1.1 (black line).
If this resistance is crossed by the PCR, the 6200 CE has 100-105 as a target which gives an expiry near 6300.
How to trade this?
Nifty is now overbought on hourly charts, and there is strong chance that it will correct.
On a strong open today, one can buy a 6300 PE near 70-80, with a stop loss 10 points below morning low.
If and when Nifty declines, this PE will rise fast, and can even go to 120-140.
If, during this time, the 6200 PCR is still showing strength, one can then buy a 6200 CE on dip below 20 (54 now). Partial profit booking in the 6300 PE will ensure that this 6200 CE will be free of cost.
Chart of 6200 CE:
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