Premarket Capsule | Edition-07

Analysis of Nifty using Renko

Nifty is trading above 22100 which is Bullish. Break above 22200 will form a Head and Shoulder breakout. Till the time nifty hold 22000 levels we can trade in the bullish direction. Today it was observed that markets were not able to break above 22200 levels. Crossing 22200 will be interesting and may touch the ATH. Breadth analysis of Nifty 50 can help us understand if the breakout will sustain or not.

Low of first 15 min candle was intact and subsequently gave a strong move of 100 pts. PCR and TOI were also bullish.

I have explained the concept of first 15 min candle further in my YouTube video

I was observing 28-Apr-2024 22200 PE

If you see the PE lost it premium because of both Bullish move at the start of the day and later due to sideways action. When you know the direction of markets it becomes easier to pick a trade and follow.

Logic for trade PE chart is discussed in this video. However the same trade is not discussed but you will understand the logic of this strike and why PE short from the below video.

Open Interest - Nifty 50

PCR is 1.13, which is bullish

Max PE writing is observed at 22000 and 22100, suggesting strong support. Break below 22000 levels will bring the market swiftly down. Max CE writing is seen at 22500 reflecting resistance.

Markets may be volatile around 22000 levels and can give whipsaw for options trader near these levels.

Total Open Interest (TOI) Analysis

TOI of weekly seems to be bearish, however if you observe Monthly TOI for April expiry is Bullish and holding its position. Credit spread opportunities in Bullish direction with favorable risk can be identified.

FII Activity

Breadth Analysis of F&O Basket

The breadth of F&O basket has improved to 70%. Overall sentiment remains weak as the X% breadth on higher TF (3%) is sloping downwards. We may find good shorting opportunities in relatively underperforming stocks. Shorting the market should be done with precision as the bounce can be lethal and you may get trapped. When the slope of 3% of Breadth turns upwards we can further look for long opportunities. Currently, stock specific trade should be taken with caution.