Anomaly spotted via SMT. NIFTY may turn red again.
- Arup Nag
- Nov 28, 2016
- 1 min read
I was bullish on NIFTY from 24th Nov close at 7965 and in last two trading sessions from there NIFTY has reached 8127 yesterday. I booked the gain of 162 points and spotted an anomaly using our proprietary indicator SMT. Yesterday NIFTY closed marginally higher by 12.50 points whereas the chart below shows SMT has gone down from it's previous value, indicating this upmove is no longer supported by smart money buying.
This weakness has prompted to go short on NIFTY at the closing of yesterday's session and we expect the downturn to resume shortly. However, it is always advisable to hedge one's position by writing OTM calls. In this case the 8050 puts having delta ~-38% were shorted in the ratio of 10:16 (futures:options) because if the up move continues for a day or two before reversing downside, the premium decay will work in advantage of the trader.
Tags: hidden divergence, custom indicator, divergence, proprietary trading, futures, trading, smart money tracker, smart money, nifty, indian stock market, forecasting, regular divergence, derivatives, finance, prediction, options, market analysis