Nifty Futures inventory went long to too long on last Friday. At the Monday open, trading confidence is initially low. Trading confidence is low even after the initial – 2 day breakout with a partial gap fill. However during mid of the day,, one timeframing against the Initial Balance direction is where exactly high confidence sellers started taking control and pressed the price towards the Prominent POC of control 10940 levels.
I guess Nifty is in a make or break zone as the higher timeframe range is getting tighter & tigher. The United States and China slapped tit-for-tat duties on $34 billion worth of each other’s imports on Friday, with Beijing accusing Washington of triggering the “largest-scale trade war”. Despite the negative news factor, Asian markets (China, Hang Seng) recovered the early losses and closed positive.
Nifty Futures trading in 10600 – 10900 range and this range is getting even tighter possibly 10700 – 10900 in the near term as the call/put writers are writing at tightly packed zones. When Comes to Nifty Futures Index short stops are hunted in a phase manner. And more short term stop clusters are in the zone from 10790 – 10850 levels. Short term sentiment maintains positive for last 5 trading sessions.
High Volatile Choppiness is the name of the game being played in Nifty. Since 25th of May lack of serious buying and lack of serious selling is witnessed which is keeping the market in a range despite Chinese market crashing and emerging market currency crisis. Local currency USDINR too touched all time high and currently around 68.74
Bank Nifty Futures sellers are in control however momentum sellers are clearly missing from the market. Hourly support comes around 26206 levels. Throughout the June month bank nifty futures is trading in a 1000 point range and the momentum is falling for most of the banking stocks. Only Few stocks like HDFCBANK, Kotak Bank, Yes bank and rest all from the Bank Nifty pack is showing declining momentum.
Nifty Futures is still not out of compression yet and continuing with the 10600 – 10900 range for July series. More frustration is likely among the trend followers and short-term direction index futures traders. Volatility is flip-flopping. It is always good to recognize this sort of tough game for any kind of directional players that will eventually reduce overtrading.
Nifty Structure is poor in the last three trading sessions indicates the presence of short-term players. Often short-term players are fickle minded and they have a tendency to reverse their positions at the edge of the balance. On Mondays, Trading session price moved towards the 10820 and 10835 levels followed by price rejection at the top resulting in a poor structure and poor high at the days top. This provides interesting trade setups to fade towards the previous poor structures.
Still, Nifty Futures is struggling to find its direction for this month. So far in this series, Nifty went down 10552 levels and no supportive active from the sellers and the price manage to move to the other side of the consolidation band 10800 levels. No supportive action from the buyers at 10800 levels price again rotated towards the center of the consolidation band 10560 – 10800.
Poor Structure in Nifty futures that the regular daily structure last couple of days indicating that more of emotional shorter term players are reacting to every tiny news information very emotionally. However, there is a lack of serious money last couple of days keeping the market in a 200 point tight range since 25th May 2018.
Highest Open Interest among option strike price is the widely used terminology to identify where most of the liquidity flow happens i.e where more of the writers and buyers willing to hang around. Is there we can get any meaningful & real intelligence from such information that is the curiosity it makes me to collect historical highest open interest for all the stock futures price using python (my team had built me a simple app which does that little work) and used plot.ly for visualization.
Nifty Futures during May series ended marginally negative despite news factors like Karnataka hung assembly, EM Currency crisis, Italy Crisis. Year to date Nifty is up by 1.7%. The first half of the June Expiry series trading could be in the range of 10600-10800 range. Volatility Index (India VIX) also trading below sub 14 levels indicating a muted trend in the near future.
Nifty Futures on Friday’s trading session again bounced back above important and critical reference 10564 (Double distribution reference). Thursday’s and Friday’s trading session involve more of a old money covering their shorts rather than a fresh buying. That brings the question is the inventory adjustment is over as short term inventory when short to too short on Wednesday’s trading.