Premarket Capsule | Edition-03

Analysis of Nifty using Renko

As shared in yesterday’s PMC I was expecting the market to consolidate for few trading hours before it further continues the bearish trend.

The view remains bearish to sideways. Selling CE at every bounce tomorrow will be a good trade setup. If you are trading based on Point & Figure charts, look for Bull-traps of HPs on 1% (1-min) Option charts

If you prefer trading directional Options Selling, prefer next week contract instead of current week for tomorrow’s trading session.

Open Interest - Nifty 50

Based on Open Interest data, there's notably more Call writing than Put writing. The Put-Call Ratio (PCR) stands at 0.62, signaling a bearish sentiment. The maximum Call writing is at 22000, indicating resistance levels and maximum Put writing is at 21500, indicating support levels. Though the support seems to be weak. Short term support levels at 21700 based on today’s OI data.

We should look at shorting Call Options when market breaks important levels and further slides down. Going long in Nifty might be risky.

Multi OI Analysis

The top-left chart shows monthly Total Open Interest (TOI), while the bottom-left chart displays weekly TOI. Both TOIs indicate a bearish sentiment currently. Credit spreads based on CE can be observed and traded.

FII Activity

Breadth Analysis of F&O Basket

The breadth of F&O basket is flat at 27%. Overall sentiment remains week. There is still some scope of decline in breadth in this week. Be causes of building new shorts in the market.

Sectoral Breadth

X% Breadth of Nifty 50 is 26%, getting into oversold zone. Majority of the sector are turning bearish from price chart. Any bounce in the market will be for sell.