A quick comment on the Nifty action of today.
I had noted the action of today to form a “p” shaped profile. We have seen earlier how a “b” shaped profile results in a stalling of an upmove. A “p” shape on the other hand can be a pre-cursor to longs unwinding in a stock or index.
Let’s have a look :
The 2 day profile shows a top heavy distribution in the shape of a “p” enough to get us profilers to think about short set-ups in the morning.
5377 will again be a point of reference to the upside. Of course, as in every close, the open needs to be monitored to ensure that the market is thinking the same!
I also ran a quick check on the open interest for June and I found something particularly interesting at the 5400 strike.
Have a look :
Notice the buying in the 5400 PE of 371000 and the selling in the 5400 CE of 350900.
Smart money was moving into short positions by the close today.
So Profile and Open Interest point to a move downwards tomorrow.
Let’s see how the day unfolds..