NIFTY weakness ahead.

On Friday 9 Dec NIFTY inched ahead at a slower pace and closed 15 points up. However, this move is not probably supported by the smart money buying because we could spot an anomaly as indicated in the updated chart below. Hence the bullish hedge was closed near the end of Friday and a bearish hedge was created by selling NIFTY Dec futures and NIFTY Dec 8200 puts.

The advantage of creating a hedge with selling options is to collect the time premium for a few days if the anticipated reversal does not happen immediately. In the past it was observed that sometimes after an anomaly is spotted, the market waits for a few more days before another confirmation in the form of divergence emerges. During these days the sold options make us money.

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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