My query in yesterday‘s post got answered by the action in the Nifty today, but the end of the day left behind another question about the range we find ourselves in.
Whilst the data was very clear yesterday about a down day in the markets today, I am not very comfortable in putting forward a view for tomorrow as the data throws up ambiguity.
Yesterday at the highs of 4940-4949 it was clear that the generals of the army- Reliance, State Bank of India and Infosys were not in a mood to go higher, today each was touching it’s day lows as the Nifty was moving southwards.
Coming back to the Open Interest table:
What favours the bulls:
a) Exceptionally high OI of 7.4 million shares at 4800.
b) 48 K put lots were added today against 26 k call lots ( big diff from yesterday)
What favours the bears:
a) Addition of 38% and 26 % at strikes 4900 and 4800 in Call OI.
b) Bulls moving the defence line to 4600 by adding 11 % at 4600 today.
The addition at 4600 of 11 % by put writers may be sending us the message that 4800 may crumble and if it does then we reach 46xx levels in no time.
Important levels to watch for downside tomorrow are 4765-4785. Upmoves can be considered only above 4865-4870.