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NIFTY – 17500 by Monthly Expiry?

Today we will see what can be in store for the monthly expiry of Nifty for September 2021 based on the current data available.

From the Option Chain two important strikes that have highest cumulative OI are

17800PE – Going by the book it indicates that 17800 is support

18000CE – Going by the book it indicates that 18000 is resistance

Mid of these strikes is 17900 where 4 strikes will become zero and all near by strikes lose the max premium in the coming 3 days.

Now let’s go and have a closer look and see if there’s any surprise move in store based on what was happening in NF after the last weekly expiry on Thursday, Friday and Monday this week.

23/9Day 1 : On Thursday i.e. 23/9 we had a TREND UP day on NF and on this day very heavy PE writing happened on 17800,18000PE strikes which paved the way for NF to break previous swing high of 17800 and got closer to 18,000.

24/9 – Day 2 : On Friday the PE writing shifted to 17900 strike on a heavy level quite similar to 17800,18000 strikes.

27/9 – Day 3 : On Monday the writer’s focus shifted to CE side strikes i.e. 17400,500,17700,17900CE strikes and also some good unwinding was seen on 18000 PE strike.

Day 1 Close – 17843 , Day 2 – Close – 17847, Day 3 Close – 17862

Few important observations

  1. NF is built on PE writing support from 17800 strike but that doesn’t look like a strong one given that this writing came in towards the market closing on 23/9 i.e. after the upmove is almost about to end. Also the premium collected is just about Rs.130.

2. India VIX has risen 12.5% since 23/9.

3. CE writing from 17200,17400,17500,17700,17800,17850,17900,17950 strikes is huge.

4. PE addition on 18000PE is being unwinded as profit booking on short Puts.

5. Almost 2 million addition on 17900PE at 120-125 Rs which came in at 24/9 opening where price was in euphoria on upside.

PE Side: 18000PE Unwinding + Time at which 17900PE added + 17800 Not a strong base as writing is by the laggards.

CE Side: Suddenly all CE writers have woken up and writing call even ITM strikes very madly

Conclusion: NF looks like a quick drop possible to 17500 by expiry of September 2021

Disclaimer: This view shared is my personal opinion based on data analysis and interpretation, please excercise your own diligence while making any trading decisions.

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