Why Nifty Plunged 143 Points, Will It Trigger Fresh Selloff?

Why Nifty Plunged 143 Points, Will It Trigger Fresh Selloff?

Amplify Trading Academy  | May 15, 2019 19:09

Fierce Competition Between Buyers & Sellers

India’s benchmark Nifty witnessed the fierce competition between buyers and sellers in today’s session around 11270. Yesterday’s closing at 11265 had created a window of opportunity for the buyers to regain control of the index. In today’s session, the buyers tried to take control of the index towards the 1st half but they failed as India Vix spiked above 28 and caused the implied volatility to shift in favor of the institutional sellers who carried forward short positions overnight.

The institutional sellers used the implied volatility thumb rule to neutralize the theta dilation in Put options and triggered yet another fall till 11153. Implied volatility thumb rules can be applied by retail traders during major events like the Lok Sabha election in congruence with Black Scholes calculations.

Nifty Options Data

Will It Trigger Fresh Sell-Off?

Although Nifty has tanked 143 points today, it has failed to break today’s range low. The one parameter which will decide the direction tomorrow is the drift in implied volatility in Put options. Today’s closing at 11162 indicates that sellers have regained control of the index after yesterday’s profit booking. The 3D Delta system is indicating that the institutions are waiting for the arrival of new information and might need a gap down opening to trigger a fresh sell-off.

Tomorrow’s Outlook

Today’s closing at 11162 has tilted the scales in favor of the sellers. The 3D delta system is indicating that institutional sellers are waiting for additional news. Although implied volatility is a phenomenon used by institutions during major events, Nifty might witness fresh selling even if the market triggers a gap down opening below tomorrow's range low. What are the odds of a bounce back? For a buy bounce back to happen, institutional buyers must enter the market. Profit booking can be triggered by institutional sellers, only if the news that they are waiting for does not come and they fail to break tomorrow’s range low.

How To Execute Intraday Swing Trades In Bank Nifty

Intraday swing trades can be executed on days like today when the buyers and sellers are busy deciding the market direction. The gamma vega covariance factors of Call and Put options can be used to identify the neutral zones of the range and intraday trades can be executed.

The important question is why did the software choose Bank Nifty and not Nifty? It is because intraday swings need to be swift and must be backed up with aggressive vega shifts. The 3D Delta system scanned the market and picked up a long trade in Bank Nifty when the index hit a low of 28765 in the first half. Since it was a contrarian swing trade, the stop loss was just 25 points, with an upside target of 100 points. Bank Nifty futures were bought @ 28790 with a target of 28890. Bank Nifty was bought @ 28790 around 1:21 pm and squared off @ 28890 in 12 mins sharp at 1:33 pm.

Today’s Trade Of Bank Nifty Future

Bank Nifty Options Data

Bank Nifty Options Data

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Dheeraj Gujaran
Dheeraj Gujaran

What a subtle way to advertise  ... (Read More)

May 16, 2019 15:03 GMT· Reply
Tanuj Agarwal
Tanuj Agarwal

Go to his website mentioned by the name here. U need to pay for the method he describes here. He won't give it to you for free.  ... (Read More)

May 15, 2019 18:08 GMT· Reply
Ravi Chndran
Ravi Chndran

Please dont mind, if anybody want to become billionaire to millionaire , its simple start trading in Bank nifty and nifty option   ... (Read More)

May 15, 2019 17:33 GMT· Reply
palash roy choudhury
palash roy choudhury

Vague. "everyone is intelligent in hindsight" is the summary  ... (Read More)

May 15, 2019 16:24 GMT· Reply
Pragnesh Patel
Pragnesh Patel

where i found 3d software  ... (Read More)

May 15, 2019 14:49 GMT· 1 · Reply
Poke Lord
Poke Lord

Whatever you write sir, as i commented on your yesterday article to sell (go short on nifty and bank nifty) where you pitched for a buy. Now i have again a opposite view in index for tomorrow which is buy. And best thing we can do is buy nifty 11500 puts for this month's expiry. As expectations of BJP coming back in power. Please have some mercy on retail investors with not giving diluted view.   ... (Read More)

May 15, 2019 14:48 GMT· Reply
ANIL THAKKER
ANIL THAKKER

fantastic analysis   ... (Read More)

May 15, 2019 14:46 GMT· Reply
shaiksha vali
shaiksha vali

hello sir please tell me from which software can I seen these block scholes model data for index... iam asking you daily.. please reply me sir  ... (Read More)

May 15, 2019 14:45 GMT· 2 · Reply
Raj kumar
Raj kumar

nifty will go up no fresh selling  ... (Read More)

May 15, 2019 14:44 GMT· Reply
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