Nifty futures last Friday (May 10th,2024) experienced some buying at lower levels to close at 22140, thereby gaining 0.29%. The major gainers for the day were BPCL(4.48%), NTPC(2.73%) and PowerGrid(2.57%).
Volume & OI Analysis: The volume for the day stood at 7.16 million, which is lower than the last 10 days’ average. The cumulative open interest (COI) for the day, stood at 14.94 million which was around the previous day’s level. Though there has been no change in daily COI but on the WoW basis, the COI has gone up by 41%, supporting a huge “short build-up” over the week. An analysis of the “option chain” (this week’s expiry) shows huge open positions at 22000 strike price both at CE/PE, though the buildup is skewed towards the CE.
Price and Volume Analysis: Price analysis of the chart indicates a downtrend in “Nifty futures”.Though there was no negative delta(net of buyers and sellers by volume) built up on Friday but last Thursday’s (9th May) delta stood at -1.37 million which may be considered much higher than the average and may continue to add to the selling pressure.
Prices may continue to fall towards the major support 21900-800 and depending upon the price/volume structure during the fall, may stop the downward journey at the expected support levels.
Scenarios: Traders may experience these scenarios in the next few forthcoming sessions
Scenario 1: Prices may continue its downtrend, towards the support of 21900-800. If the support gets breached with high volume and negative delta further downside may not be ruled out.
Scenario 2: Prices may breach and sustain the resistance of 22350-400 with huge volume and positive delta and re-start the bull run.
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