NIFTY sold off as expected. Maintaining a bearish bias.

We spotted a bearish divergence on 24th Dec which indicated more selling ahead after a small pullback attempt. Exactly the same happened yesterday 26th Dec when the bears were totally in control of the NIFTY and brought down it by 78 points (0.97%) by the end of the day.

We have to continue with the bearish bias in absence of any fresh indication from the SMT chart. The bearish hedge created by selling NIFTY futures at 7995 and NIFTY Jan 7900 puts are growing in profit. Due to high VIX (gone up by 9% in one day) the options are not losing value faster but as soon as the VIX settles down the hedge will be more profitable.

Today we are going to introduce an additional version of our Smart Money Tracker (the blue line chart below) which tracks the smart money activities on a daily basis. Let us name it SMT(D). The previous one we have been using so far (the maroon line chart) tracks the activities on monthly options series basis which gives a longer term picture. Lets rename it as SMT(M).

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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