Nifty Open Intrerest, 17k Call Option chart, China Taiwan Tension!

stock stock market trading Aug 04, 2022
Trading, Stock, Nifty

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China Taiwan global tension resulted into lot of volatility in intraday on Nifty but markets continue to trade as Buy on dips without breaking crucial support levels.

It is important to understand that short term volatility can be seen due to events but the trend will not change unless the pattern is near completion. Also in this entire up move majority has been trying to catch a top without any meaningful reversal to downside.

Below is Nifty 15 minutes chart with Open Interest and Nifty 17k month end call option

Nifty 15 mins chart

Nifty 15 mins 17k call option (Aug end expiry)

Nifty first chart shows Open Interest change on the expiry day which provided classic information that Nifty will not break above 17500 levels given sharp rise in call side OI. At the same time the support at 17k had been not very significant as the change in OI was less.

We can see that even the next week expiry options are showing high buildup near 17500 calls so crossing this level is not going to be easy.

Along with that we have channel resistance now near 17550 and 17517 is the level where wave G will be 76.4% of wave A on a bigger time frame chart.

Nifty 15 mins 17k Call option – We are showing volume profile on the call option chart that suggest that important support is at 450 on the option price where there is significant volume followed by 370. The overall pattern looks like distribution and break below 450 will suggest short term fall in option price. Major hurdle for call option on upside is near 600 levels.

Strategy – Looking at Nifty spot chart and Option chart along with Open Interest and Volume profile we can see some distribution is going on here. Break above 600 in Nifty is required for upside move whereas break below 450 will be short term bearish for call to move towards 370 which is the next support area.

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