With one day remaining for the September series to close, the action would be around the 6000 strike in the Nifty with a total of 1.5 Cr in Combined Open interest at stake.
I had mentioned last time when we covered the Open interest before expiry, that smart money tends to move to the next month for all hedges, a few days before expiry and any big changes in Open interest on the penultimate day or even the day of expiry has to be greedy speculative money who inevitably get slaughtered.
We saw it happen last time when the market moved around the 5500 strike killing the CE writers who had built a substantial open Interest the previous day.
Let’s look at what’s happening at 6000 strike from the past five sessions in Sept and in Oct too.
The PE writers added more at 6000 than CE writers today in October clearly indicating that the build-up in CE OI at 6000 Sept is speculative and may not be smart money.
The range indicated by VIX formula comes to 6064-5931 for tomorrow.
5961 is the developing Value high for the month and 5947 a previous HVN which has supported price in the past.
It’s doubtful whether we will see a large movement below 5961-5947
6040-6047 still remains the zone where the seller operates from and any move back to that point will be used for more selling.
In Sum, the market looks like it will auction around 6000 tomorrow.