Looking at the above data, I feel we are heading for another choppy day tomorrow and the trade will be in the range of 25600 and 25900. Significant amount of put and call writing is happening at the above and below of ATM strike price and this clearly shows are traders are being cautious and not sure of where we are heading.
BN is trading above the 3,5 and 7 day Moving average and the resistance is at 25886 and the support is at 25707.
Opening of the session will be uptrend and if the resistances are not broken downfall may occur since bears are showing some strength with writing call options.
Considering DEC Banknifty contracts , purely based on option values, excluding TA , it seems that traders are expecting a range of 26500 on upside and 25323 on the downside till the end of November series of Bank nifty.
With Derivative data, BankNifty looks headed towards 26200. On Reversal, BankNifty might head back to 25000. So, expecting 26200-25000 range till Nov Expiry.
With the end of day, below are the points i assessed before buying the put option 25500 PE 30th Nov tomorrow (Cheap and because of the minimum capital)
Bank Nifty broke all the moving averages and took support from the 50 day EMA today. Well, this could be a reason there was some buying interest after the initial sell out. May be, It could initiate fresh buys that will take the index to move upwards.
There is so significant writing happening at the current levels and the call writing has happened right from 25700 and upto 26300. This results in indecisiveness as well as restricts the further momentum I believe.
Option writing happening on both Call & Put , Traders are expecting range bound momentum, but interesting thing is that 7DEC 25500PE Lost OI, closed in green May be some traders expecting downside on Bank nifty, what may be the your analysis. on that
As expected the day was range bound and I personally feel bears are getting control.
On the option chain, I could notice that significant call as well as put writing is happening and I assume that may be the participants are not sure where the market will be headed. Also, I feel like a break out could happen on either side may be tomorrow or Monday. And as per the option chain, the participants are ready for either side of the breakout.
Personally, I am on the bearish side as the call writing is beginning to happen at the ITM lower strike prices as well. Also there is no confidence on the put writing at the current ATM and OTM strike prices.
Also, the supports of Bank Nifty is getting lower and it touched the 7 day EMA today. CCI and Stochastic, MACD doesn’t look promising.
Bears showed their strength today and as expected the NIFTYBANK opened with overbought zones and at the later part of the session, the sell off continued.
For tomorrow I expect there could be a little interest in buying and definitely the bears will start taking control.
Put winding happened at current levels combined with significant call writing there are less chances for the bulls to take control. Expecting a bearish stance tomorrow.
Will try to enter at appropriate level for buying a put option tomorrow.
