Another amazing prediction by SMT. NIFTY sold heavily.

I mentioned in my previous two blog-posts that NIFTY was rallying at a slow pace but without much strength because the smart money was probably selling the market in anticipation of a disappointment from RBI monitory policy scheduled to be announced yesterday 7th Dec.

Here we will look at the smart money action took place on 6th Dec. At the chart posted below please see the circled area which shows on 6th Dec the NIFTY closed higher but the SMT was clearly pointing downwards indicating an anomaly and probable short positions buildup by the smart money players. Throughout yesterday until the rate announcement, the big players lifted the market up by ~0.50% but just after the disappointing announcement NIFTY fell sharply and closed 41 points lower than the previous day. Our short hedge consisted of short future (at NIFTY 8125) and short NIFTY 8050 Puts at 10:16 ratio was closed with a decent profit (mainly came from the time decay of the put options).

Yesterday's action warranted an anomaly indicating bullish bias on NIFTY. At the end of the day, the smart money tracker was pointing upwards while the NIFTY closed 41 points lower as mentioned above. This prompted us to create a bullish hedge position consisting of long future at 8100 and short 8200 calls (38% delta) in our predetermined ratio.

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

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