Call Ratios Wrapped Up
India’s benchmark Nifty opened 30 points gap down this morning at 11916 approx. Although the index had closed marginally in favor of the buyers yesterday, the index failed to open gap up and institutional buyers did not enter the market in the morning. Today’s gap down opening triggered profit booking in the Call ratios, thus Nifty slipped 100 points intraday. Traders must take note that aggressive selling was not witnessed today despite India Vix rising till 16.4 approx.
Is It A Trend Change Signal?
Today’s closing at 11863 has placed the index evenly poised between the buyers and sellers as the institutions have wrapped up their Call ratio. Since Nifty has already move 932 points in May and tomorrow is the last day of the May contract institutional traders might stay on the sidelines till the June contract begins. The 3d delta system is indicating that it is better to wait till the institutions enter the market and form a clear direction.
Taking A Closer Look At Today’s Session
There are 4 significant takeaways from today’s session.
- Nifty opened “Gap Down” around the pivot point of 11915.
- Institutional buyers did not enter the market.
- Call ratios were wrapped up
- Nifty closed evenly balanced between the buyers and sellers.
In today’s session the 3D Delta system, scanned the market and confirmed that institutional buyers did not enter in the morning. Although the index opened gap down in the morning, it advised to wait till 1:30pm before selling Call options. This is a calculated move to ensure that institutions don’t trap the Call option seller by entering the market late. Based on the system’s calculations, 11800 Call options were sold @ 94 around 1:45 pm. The Call option went on to make a low of @58.80. the position was later squared off @ 62.