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Daily Market Analysis 01 Feb 2023 Wednesday

Market Structure : Sideways / Short Term Trend Transition

Nifty Analysis :

1. Nifty closed almost as inside day.
2. Nifty made a Bullish Ascending Triangle
3. You can also see a Inverted head and shoulders pattern, which indicates a bullish momentum.
4. If Nifty crosses above the horizontal line around 17700, then there is no need to be on bearish side for short term.
5. I’ve provided few targets on the upside, in Yesterday’s Market Analysis.
6. If Nifty opens gapup above today’s high or gapdown below today’s low, then it may move in that direction.

Nifty Weekly Options Data :

1. Option sellers are holding 18000 calls heavily.
2. After that major OI on Put side is at 17000
3. Put Call Ratio is at 0.65.
4. Nifty Weekly ATM Straddle premium is at 300 points.

Nifty Monthly Options Data :

1. Options Sellers are holding 18000 Short Straddles.
2. Major OI on Put side is at 17500
3. Put Call Ratio is at 1.22
4. Nifty Monthly ATM Straddle premium is at 600 points.

Bank Nifty Analysis :

1. Bank Nifty also closed as inside day.
2. Bank Nifty also made a Bullish Ascending Triangle.
3. If the above horizontal line breaks around 40800, then no need to be on bearish side for short term.
4. There is a buying zone around 40600
5. And also you can see a pattern similar to Inverted Head and Shoulders combining all three days. This also indicates a bullish sign.
6. If this Inverted Head and Shoulders Pattern fails, we can see the move on opposite side as well.
7. If Bank Nifty opens above the zone, it will act as support. If opens below the zone, it will act as resistance.

Bank Nifty Weekly Options Data :

1. Bank Nifty Weekly options Data is similar to yesterday.
2. Put Call Ratio is at 0.63
3. Bank Nifty Weekly ATM Straddle premium is around 1050 points.

Bank Nifty Monthly Options Data :

1. Bank Nifty Monthly options data is also similar to yesterday.
2. Option Sellers are creating Short Straddles at every 500 points distance
3. Major support is at 40000 Put
4. Major Resistance is at 42000 Call and 42500 Call
5. Put Call Ratio is at 0.9
6. Bank Nifty Monthly ATM Straddle premium is at 1950 points.

Final Thoughts :

1. Nifty and Bank Nifty last 2 days price action is sideways.
2. Which indicates consolidation, that means on of these happened accumulation or distribution.
3. The pattern that is forming in Nifty and Bank Nifty, it seems bullish.
4. If the Bullish pattern fails, then opposite also may happen.
5. I’m seeing these budget day’s from 2019, I remember last year after budget is over. Option premium’s collapsed more than 50% (last year budget on Tuesday).
   • I sold ATM Straddles with fixed stop losses on both sides.
   • In the first fall, my Put stop loss is hit and call gave good profit, after that moved call SL into small profit zone.
   • In the recovery, my call SL hit
   • After recovery observed market is stabilising, created Short Straddles again.
   • Which turned out to be a good profit.
   • That means all the Straddle buyers and option buyers, must have lost heavily.
6. If you are going to trade options, put stop loss in the system. That is my advise to you.
7. This is just my view, I’m expecting a trending move tomorrow. If the first 15 minutes low or high sustains.

If you are seeing anything else other than what I’m seeing from this data, post your view below in the comments section.

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Disclaimer : I’m not a SEBI registered analyst, these are my views only.