IB Action : NIFTY opened within YVA around the POC of 29/10 i.e. 11675-11680 yet again and had a drive down which stalled exactly at VAL of 30/10, The IB has ended within the previous day’s Value area indicating no interest or new business at the opening hour.
Also the activity in options was suggesting a similar thing as all the strikes on CE/PE side have been trading within the references of the previous day’s writers indicating the trading will be within the same range yet again.
Post the IB the activity concentrated on filling the anomaly in the profile structure of 30/10 which looks to be a fresh accumulation as we liked to close above the anomaly.
Anomaly – This is nothing but a gap in the otherwise perfect bell shaped structure of the profile. you can see this in the profile shape of 30/10 where there’s some gap in 11605-11640 zone.
In terms of buyers and sellers we got one big seller who had driven the opening drive down which stalled at VAL of 30/10 but he wasn’t able to push it down through a follow-up and had to take an exit in the noon around his cost and post that exit we did see some bounce in #NIFTY which is the only opportunity it has presented for trade today.
The exit of the seller at 1:30 PM and lack of follow through on the downside indicated that any trade might be on +ve side and one had to look for breakouts in CE which we had on 11700 CE after 2:00 pm when this started trading above the morning writers levels of 108 on this one. After breaking out this has touched 150rs and this was the only possible trade that could have been played as the breakout indicated an intent to negate the singles of the day and also this is a fresh effort above the important reference mentioned in yesterday’s plan which is 11645 and after we negated the singles #NIFTY cooled off and closed as a balanced (normal) day
Going into tomorrow’s trade Buyers will need to hold 11675-11680 zone for follow through on the upside and they can get to the previous sellers zone of 11780-11815 the G period single prints of 28/10. If they can absorb the supply here then they can march ahead to 11930-11940 going forward.
In terms of key positions builtup in options EOD data suggests no big positions held by smart money on either side both in options and futures they are just neutral and willing to stay light.
Overall option chain suggests that longs in 11600 CE and 11600 PE got out today and reduced their positions by booking profit.
From a review of strike level data the following references will be the key for further move in the week.
11500PE – Rs.110
11550PE – Rs.134
11800CE – Rs.103 Writers from 30/10 who didn’t exit yet.
Comment your thoughts below.