Selling overdone. Bullish on NIFTY again.
- Arup Nag
- Dec 22, 2016
- 1 min read
On 21st Dec around the closing of the market we spotted a hidden negative divergence and shorted the market by selling NIFTY futures and NIFTY 8000 Jan series put options. Yesterday 22nd Dec we closed that hedge by booking 35 points loss on the options but 80 points gain in the futures. This is because we spotted a bullish divergence once gain (see chart below) which indicated the market is probably oversold for the time being and a pullback is imminent. Therefore we created a bullish hedge by buying NIFTY futures and selling 8100 call options which have a delta of 0.37 now (ideal for our purpose).
However, this anticipated bullish outlook may be temporary in nature and we might expect to see another shorting opportunity very soon which will resume the existing downtrend.
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