Nifty Falls As Call Options Gamma Expands
India’s benchmark Nifty witnessed a sharp correction of 90 points from the day high of 11532 approx. Today’s fall in the last hour was triggered by massive profit booking in Call options. Call options gamma had witnessed exponential expansion as the market scaled above the 11500 approx. Due to profit booking, the 11500 and 11600 Call options closed 37% and 34% below their respective highs. Currently, Options theta is indicating that Call premiums on Monday morning will decide whether the Bull market can continue. Going forward, Nifty might face resistance around Monday’s range high. If Monday’s range low is broken, the nearest downside target for the index is 11373 approx.
Is The Bull Market Over?
Nifty witnessed a buy breakout today as it traded above the intraday target of 11437 approx. The index continued moving up to 11532 after a flattish opening around 11390 approx. Options theta has undergone major imbalance in the last 30 minutes of trade today. This imbalance might have a negative impact on the bulls next week. Going forward, the Call options premium on Monday morning will set the tone for the market next week. If Nifty breaks Monday’s range low, it might scale down to 11373 approx. On the other hand, if the Bulls manage to push the market above Monday’s range high, the nearest upside target will be 11523 approx.
Hourly Scenarios Next Week
In the hourly session, Spot Nifty has closed around 11427 approx. The index is likely to find resistance around Monday’s hourly range high. The nearest downside target for Nifty is around 11362 approx. On the other hand, if Nifty trades above Monday’s hourly range high, it might scale up to 11455 approx.
Bank Nifty Options Data