Mynac posted this thought last night :
I am fully convinced that 5135 will be now big support but do you see any possibility of Nifty even trading above 5200 tomorrow? I personally don’t think so because in which manner today Nifty traded in last one and half hour between 5190 to 5170 is real worry for me.At present only the good thing is that the global clues are not too bad to spoil the game totally.The 5200 PE writers will have to give the support to market because now they are in danger zone because Nifty has given a clear cut very much below 5200 close today.Let us see tomorrow.Good Night.
You are spot on with your analysis.
In Vol profile charts 5135-5225 represented a low vol non-trade facilitation zone with the edges the high vol regions ( +/- 5 pts maybe)
On Monday we zoomed past this zone ‘cos it was not intended to facilitate trade.
However what we did in 3 hours that day, we have repeated over the past two days as the low volume in the zone had to be addressed.Further more Tuesday morning there were signs of buyers drying up which meant a rotation at play and a test of 5135 again. The gap between Monday’s high and tuesday’s open ( again a low volume region ) was addressed in the first session today.
This auction in the morning in the gap region allowed me to think that the rotation is over and we may see higher prices.
However that is changed in the afternoon session and you are right about lower prices ahead.
Prices are operating in a bracket of 5135-5210 at the moment. There can be an excess of 35 points either side.
If you notice the open interest, smart money has sold the 5200 straddle.