First signs of expiry at higher levels on Thursday

It was not without reason that I mentioned of a possibility of expiry being above 6200.

If the charts shown below are right, we might be seeing a repeat of what happened in August 2013.

Nifty made a low at 5118 just a day before expiry, and some action started in Nifty options that gave a hint of the big rise that followed till expiry.

The August 5100 CE chart is shown below with the Open Interest of that CE option. (this is a 5 min chart).

5200 Aug CE made a low near 20 on 29th August, and after 1 pm, the Open interest in this CE option started dropping drastically.

The 5200 CE rose all the way from 20 to expire at 210 in just 10 hours !!

If one looks closely at the 6100 CE chart of today, a similar pattern can be seen emerging.

The 6200 CE also shows a similar pattern:

If this shedding of open interest continues tomorrow, Nifty can rise.

As regards levels in Nifty, the high before the RBI policy today 6171.8 needs to be crossed fast tomorrow, for bears to panic.

This is just an initial sign and needs confirmation tomorrow by way of drastic fall in Open interest of the 6100 and 6200 CE options.

A gap fill, or a huge island reversal ?

On looking at the daily chart of Nifty futures closely, it can be seen that there isa gap from 25th November (high 6141.5) which was never filled till date.

Even today, the selling took Nifty futures to 6142.5, still leaving a gap of 1 point.

Bulls can say the gap has been filled. If Nifty futures does not go below 6141, we can see a bounce in the market (maybe to try and fill the wide gap left today).

However, should Nifty futures open with another gap down below  6141 tomorrow, this can be a huge island reversal !! (extremely bearish till it remains below 6141).

Watch the open and low tomorrow.

 

In case of gap down on Monday, what to expect

With the way US markets closed on Friday, it is almost a certainty that our markets will open with a gap down tomorrow.

In case of a gap down, the support zone marked on the chart might come into play, and if held, longs can be initiated.

I still believe expiry will be near 6250 or above (I can be wrong, please do your own research before going long).

Options data will provide a clue about expiry levels as Monday and Tuesday progress.

 

Sesa Sterlite - an interesting trade coming up ?

Sesa Sterlite broke out of a Pennant formation on 20th January on hourly time frame and completed the text-book target.

The stock is now repeating the same pattern and a break out above the pennant (211 fut), has the potential to take it to 226-230.

The pattern might play iteself in the first hour itself tomorrow, and once the breakout happens, a 220 CE can be bought near 2-2.5 for a target of 6-8.

Where is Nifty heading in January ?

online poll by Opinion Stage

An unique Pair Trade

This is a combined chart of Tata Steel 410 CE and Tata Motors 360 PE.

The pair is showing a bottoming out formation near 11.

One can buy BOTH for a combined total near 13.5, with sl below 11.

Below the Sl, one can exit the leg which is going against the trade, and ride the one going for.

PLEASE IGNORE THE LABELS AND TITLE ON THE CHART ! 

 

A poll on Infy stock movement before the results are declared on 10th January

online poll by Opinion Stage

LT update, first target 975 ?

Updated chart of LT, after the break in the long term trendline.

First target 975 possible on futures.

INFY short trade update

A potential short trade was posted on 3rd January. 

An update below:
 
Infy might be at a support now, and the PE too has reached the target. 

Advisable to cover the PEs

INFY 3400 PE chart :

Infy will weaken further only below 3440 or if the PE crosses 110.

Tata Steel - one more stock breaks a long term trendline

Tata Steel might be headed downward, with the break of the long term trendline.

It is a short on any rise, with a stop above that trend line now.

 

Infy pre-results trade

As is known, Infy becomes very volatile before and after results.

Based on charts, Infy has formed a potential triple top near 3575, and the 3400 PE has formed a double bottom near 74.

The 3400PE gives a low risk trade, if bought near 74-77, with a sl below 70.

Infy cash hourly chart:

 
Infy 3400 PE  chart :

This pattern becomes invalid if Infy closes above 3580 cash.

Nifty update based on Options data

Although Nifty was very strong in the first half, and the PCR at 6300 strike price went to as high as 1.8 (very bullish), the fall in the second half has damaged the Options positions and the PCR at 6300 crashed to a low of 1.07 towards the end, thus putting the 6300 level under threat for this expiry !.

Bulls need to be really worried if this falls below 0.9 in coming days, after which they can forget 6300 for this expiry.

If 0.9 - 1.0 is protected, bulls can expect another rise above 6300 next week, before the results season kicks in.

 

Results of Poll on 28th November regarding Nifty close on 31st Dec

online poll by Opinion Stage

Which level will we see first on Nifty SPOT

online poll by Opinion Stage