Nifty continued its downtrend and 5800 put has given 200% return from the date of posting. The index is expected to find decent support in 5650-5700 zone in the short term and a decent bounce to 5880-5900 can be seen.Apart from the wave theory time cycles are playing important roles this time and it is expected to settle down near the temporary top between aug 20-26 and till then we could see some bottom fishing close to the support zones. Any upmove from the current lows can be temporary and give it some time to settle down and go for some shopping. The long term uptrend is in danger as most of the stocks are close to their 52 week lows and index cannot show up as an out performer.Nifty is showing some bigger wave counts and we could see that nifty is probably making a Head and shoulder neckline formation close to 5700 zone and it could result in some immediate bounce backs.
Derivatives Update
Nifty futures shed some premium on the bounce back with a decrease in Open interest indicating some long positions got squared off by traders after the bounce back.Volatility index came down from the highs indicating 5700 strike put can act as a support zone in the near term.Unwinding of 5800 and 5900 put continued and we should see whether options writers would again get active on these strikes so that the market moves higher.Call writing could be seen even in 5700 and 5800 strike and it is evident that traders are expecting market to be in a range of 5700-5900 and they are just using the premium to write options for the current series. As per the options data 6000 can be the ceiling for the market in this expiry and short term bounce is expected till 5880-5900.
Derivatives Update
Nifty futures shed some premium on the bounce back with a decrease in Open interest indicating some long positions got squared off by traders after the bounce back.Volatility index came down from the highs indicating 5700 strike put can act as a support zone in the near term.Unwinding of 5800 and 5900 put continued and we should see whether options writers would again get active on these strikes so that the market moves higher.Call writing could be seen even in 5700 and 5800 strike and it is evident that traders are expecting market to be in a range of 5700-5900 and they are just using the premium to write options for the current series. As per the options data 6000 can be the ceiling for the market in this expiry and short term bounce is expected till 5880-5900.
