Nifty upside remains restricted as per Open Interest Data.
The all-time high of 18600 seems like a strong resistance for Nifty in the days to come. After 5 consecutive red candles, Nifty is approaching a major Support zone of 17950-18000.
As per Open Interest Data, 18000 will be strong support for Nifty. Any sustained move below 17950 can lead the index to fall towards 17700 and 17450 levels. With Bank Nifty strong and volatility in the markets due to earnings announcements,18200 seems like a hurdle to crack. The OI data suggests Call heavy writing with a PCR of around 0.6.
On the smaller time frame, any sustained move below 18050 would lead the index towards 17950 levels. On the upside, we feel the movement will be restricted and the index can take resistance at 18200 and 18300 levels.
Short 17600 CE and hedge it with 17700 CE. This will need a capital of around Rs 32500. The maximum profit is around Rs 610 with almost a 95% probability of making profit.
- Pitanjal Dutta (email@example.com)