Nifty Next Day View

NIFTY

After budget day nifty rallied around 1.8% making the high of 18134.75.

The scenario of the last few days

:- On 13 Feb nifty made the low of 17719.75 and after that, it rallied to 18134.75. There was complete buyer control at that time.

:- On 16th Feb Nifty opened the gap up by almost 0.5% means at the beginning of the trading session the bulls were in control but after the high of 18134.75 the buyers started taking profit and dragged the market lower till 18000 and filled the gap. This signifies that the bears were in the process of taking control of the market.

:- They took control of the market immediately the next day and the market opened a gap down below 18000 which is a psychological level and support for the bulls. The buyer tried to enter but failed to sustain and the market dragged from 18034.25.

Technically it looks like the sellers are somewhat trying to control.

Now Option Chain Analysis

1) First thing to observe in the option chain is PCR. PCR ratio is less than 1 and stands at 0.75.

2) This PCR is the indicating that there is heavy call writing in nifty.

3) Last day we have seen huge OI build-up on the call side which means the big players are writing the calls of OTM strikes.

4) There has been a significant change in the PUT ITM strike as the ITM put sellers have been closing their position because of the fear of the fall in the nifty.

5)18000 Call has huge OI and almost 62 lacks OI got built up last day out of 118 lacks.

6) If the market comes to retest the 18000 level there is a high tendency that the call seller will get activated here and take the market further downside.

7) For the last 5 days the nifty has been increasing but the OI has been decreasing. Negative divergence is being here on the chart also.

After all this, I am expecting 17700 in the next few days.