The pattern posted on 4th November is still very much valid, and the 6400 CE has hit the lower band today.
A small bounce might be due, but direction still remains down (based on PCR).
If the 6400 CE breaks 30-33, it can go down all the way to 8-10
Further to the post dt 4th November, the 6400 CE is very near the support band now, and Nifty can bounce.
If Nifty remains sideways between 6200 and 6300, this trade might do well.
Short 6300 CE and 6200 PE for a total near 185, with a stop 220.
For those who see DLF as a bearish candidate, the high today offers a good risk:reward to go short with stop loss above the high.
If this pattern works, one can expect at least 145 in futures.
With Nifty futures and sensex having made all time highs, and Nifty spot threatening to do so, here is a study based on Options to try and see what Nifty can do in November.
Based on the Options data, it appears Nifty might remain rangebound within 6100 to 6400 range.
This study based on Options is a bit too early, and can change pretty fast, but any change spotted will be highlighted here immediately.
The 6400 CE chart shows a resistance near the 100 area, and support near the 35-40 area.
One can safely short either the CE or Nifty futures near the resistance zone for a target near the support band.
The current difference is about 50 points on the 6400 CE which means a downside of about 100-150 points on Nifty futures, which gives a target of approximately 6150 on Nifty Spot.
A look at the PCR at various strike prices also reveals a similar scenario.
The PCR at 6300 is still 0.87, thus indicating that Nifty spot is not comfortable above 6300 (CMP 6317).
The PCR at 6400 is extremely less at 0.24 and bulls do not seem to be serious as of now to plan an assault on that level.
On the lower side PCR at 6000 and 6100 is very strong, thus indicating that breaking these levels is going to be difficult in the near future.
Keeping a close watch on how these PCR values change over the next few days will give further hints.
As of now 6150 - 6320 seems to the range for Nifty spot.
TRADE IDEAS:
Go short on rise with that level of 6400 CE as SL (100-102);
Go long on any dip near 6150, with SL as 35-40 on 6400 CE.
A survey was conducted in which 10 questions were asked.
Following is the analysis of the answers to those 10 questions (there were 112 responses, however, only 100 can be analysed):
A highly oversold and forgotten stock is breaking out.
On a close above 149, NTPC can go to 162 and 173.
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:
