In the last post done on the subject we had noted that the Nifty and the BankNifty did not enjoy a lot of buying support at higher levels.
When delta and price do not agree then many times a reconciliation is around the corner and such moves when price and delta diverge are always higher risk.
A typical trending move should always have delta and price agreeing , however there are times when they do not as different timeframes exist in the market at all times and there are always changes happening which we try to monitor through the Open Interest numbers.
Here are the latest charts :
That move from 5824 was the one which had divergence between price and volume after the initial part of the move to 5824 showed good green delta.
As we are closer to the point we have seen some of the shorts lifting and no major additions in the past two sessions despite price moving a 100 points lower.
This means that the seller from 5824 is still holding, having added at higher levels.
The BNF chart is also showing red delta with no additions in the last 2 sessions but a market controlled by the sellers again.
Overall we will have to see a lot of green delta in the form of short covering over the next two days for the market to climb higher.
An increase in the red however is new shorts coming into the market.