Viren has taken the evening off and asked me to post the charts on his behalf. He will be back in the comments section for his live market commentary.
So here they are..
I want to begin by thanking Mr. Illango for the recognition he has given to this blog on his site http://tradeinniftyonly.blogspot.com/.
We are a young blog and require all the support and encouragement from experienced bloggers such as him.Thank you very much.
I also want to thank Viren for the way he has put us all ahead of the market for the past 150 points-up and down. My appetite has been whetted for some more profitable set-ups from him.
I want to share with you this evening the Open Interest table for April:
With the extended holiday weekend coming up, option writers have utilised the opportunity to write both the 5300 call as well as the 5200 put, with an eye on theta decay.
This can be seen in the Open Interest at both the above strikes, which are the highest.
I do not expect any significant movement in the market tomorrow. We may remain range-bound.
However looking further into next week, it can be safely assumed that one of the strikes will give way, as you cannot expect Nifty to be in a 100 point range till expiry.Also OI is above 5 million at each strike, so a break will bring a lot of momentum. Based on the current Implied volatilty the range for April expiry comes to 5000-5500. So whichever way the break-out occurs, there is a 200 point movement to be had either side.
The charts I had uploaded last week in this post on Seasonality and Markets here paint a picture of a bullish early April.
However, even if you take a non-directional view and buy the 5200 put and the 5300 call at around 80 each on Monday (not tomorrow), you will still have a profitable trade on your hands, as soon as you get a confirmed break of either level.