The BNF OI puzzle, what I think happened. This is post mortem analysis ๐
COi was going up like crazy since early March, positions were being created in far month ( go thru my previous tweets)
OI = net shorts = net longs. So informed traders were taking a huge position expecting a parabolic move ( we did not know whether up or down). As of now, my guess is that the whole position was a long position. Someone had the info of the rate cut
You can see that the positions were cut hugely on 1st April. What happened on 1st April ?
This happened ๐๐
If the rollback did not happen ( due to whatever reason), BNF would have gapped up by 1000-1500 points and the shorts would have been killed, and longs would have been laughing all the way to the bank. See the cut on 1st April
But since the rollback did happen, what we now had were trapped longs. that's why we are seeing any upmove getting sold as longs get rid of their positions. COI now is down to normal levels as you can see
My guess is there are still some longs trapped, so as long we do not close above 33600 chances are we will see one more spike and climax selling on the downside. There is a strong supply in the 33400-33600 zone. the 33600 figure is quantitative
Will show Nifty and BankNifty charts, best if one sees on a laptop/computer screen to see the layout. Mobile apps seems to show only one chart. Change background to black to see the SL lines.
Options Analyser analyses the whole option chain and shows Bullish or Bearish. Deep blue bars hitting > 96 is strongly bullish. Deep red bars <-96 are strongly bearish.
Value above 68 bullish , below -68 bearish.
Values between -68 and 68 are neutral/congestion .
Buy or Sell signals gets generated based on AVWAPS, shows entry point and SL .
There is another signal shown and P_Buy or P_Sell. That's a pullback buy or pullback sell , generally much more accurate than a normal buy/sell
Nifty puts added OI from 22000-22000 which is normal as Nifty went up, so is the cut in the 22k ce OI.
What is abnormal is the cut in 22500pe, that should have added OI by the same logic.
So we now watch two strikes :
Nifty bullish if 22500pe trades below 310 and 22000pe trades below 80.
Nifty bearish if 22500pe trades above 392 and 22000pe trades above 150
On BNF , two strikes stand out. The addition on the 47k ce ( thrice that of 47k pe) and addition in ITM 46500ce.
So we will watch these two strikes
BN bullish if the 46500ce trades above 1175 and 47000ce trades above 870
BN bearish if 46500ce trades below 850 and 47000ce trades below 580.
What's very interesting is the OI behavior on the 46500ce , the sellers kept on selling even when BN went up without any fear.
Makes me say they know something which makes BN much more bearish than NIFTY
Last but not the least, my standard template on eod charts.
Make your own inferences, important to keep the broader picture in mind.
BankNifty had an almost 28% increase in COI today. This COI increase in a large range day ( up or down) would have been justifiable, not in a range day like today. The only logic can be the coming RBI MPC meet from which someone is expecting something very very big
So I went back for the last couple of years and tried to check how BN behaves after such and increase in COI
Then went through the bhavcopy to check which month has seen the increase ( will give an idea / confirmation about these players when they are expecting the event). It's Oct expiry, so this is a near term game
Thanks to everyone who enquired about my well being. For the last almost 2 months, suffering from probable long covid symptoms.
1. I am a type 2 diabetic. Sugar etc was always under control. Now sugars, cholesterol etc have all shot thru the roof. HBA1C at 9 , ACR is 130
2. Joint pains at shoulder , xray-usg-mri does not find any physical reasons
3. Huge fatigue. Getting out of bed or going out is a chore.
4. Problems with short term memory. I am forgetting certain things , have been pointed this out by my near family members, I did not realise this myself. This is actually pretty scary.
5. Abcesses/styes out of nowhere ( one was solved by a twitter doc friend)