NIFTY may encounter further selling pressure on the expiry day
- Arup Nag
- Dec 28, 2016
- 1 min read
A sudden and strong pullback on 27th Dec had dented in the profitability of our bearish hedge position, however there was no reason to close it and go long because the overall market was still thought to be bearish. Yesterday 28th Dec the NIFTY was continuing with the uptrend until the last hour when strong selling pressure forced it to come back near the opening level and it closed only 2 points higher. Looking at the SMT graph below which is pointing sharply downwards, we can spot a clear anomaly, which prompted to hold the bearish hedge and watch the market today. The NIFTY futures sold at 7996 are due to expire today and incurring 40 points loss, the NIFTY Jan 7900 puts have lost 10 points so far (X 1.6 times which is equivalent to 26 points gain for the hedge).
Because of the spotted anomaly which probably indicating more selling to come in the market soon, we expect a bearish day today ahead of the Dec series expiry.
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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