As we have discussed, Nifty has been moving upwards in the channel. Now, it has broken down to the lower channel, which shows a bearishness in the NIFTY behavior. There is a high probability that it will now continue in the lower channel as a bearish trend. OI data also confirms its bearish nature with PCR = 0.70. it will be bearish for now.
Reasons:
Verdict:
Bearish
Plan of action:
Sell 21550 CE and hedge it with a small CE premium.
Reasons:
- It has entered the bearish channel side. Now, fall might be sharp. (Bearish)
- Price < EMAs that show the bearishness in the market. also it has given crossover(ema(13,50)) which always shows reversal of the trend.
- RSI = 40 shows the weak bulls and might enter <40 that will be the start of heavy bearishness.
- if we see the OI data PCR = 0.70 which shows bearishness in the market.
- 21500 will be acting as a nice support level to the downside. Upside 21600 will be acting as a nice resistance zone; OI data also confirms that.
Verdict:
Bearish
Plan of action:
Sell 21550 CE and hedge it with a small CE premium.
