What Bank Nifty Fibonacci, Elliott Wave Open Interest Analysis Suggesting?
Aug 17, 2021
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Bank Nifty Impulse Elliott wave pattern along with Open Interest is giving amazing Trade Setup.
See in the below chart we are combining both of these techniques together to derive at prudent trade using Options
Bank Nifty Hourly Chart with OI chart:
Elliott Wave analysis:
Bank Nifty showed amazing impulse rise from the lows of 34200 to the highs of 36200 levels.
Two stage confirmation for trend reversal: From there prices broke below 2-4 trendline in faster time than wave 5 took to form thereby confirming that the impulse rise was over.
Second stage of confirmation is obtained when entire wave 5 was retraced back in faster time than it took to form. This was the area which virtually confirmed that the rise is over and corrective overlapping move is starting.
With this information a trader can be aware that he has to place his bets for counter trend move which is going to be slower and non – trending. Over here it is Options that come handy and selling Out of the money Call and Put Options is the best strategy.
Open Interest – By combining both Calls and Puts Open Interest cumulative chart shows where the Option writers are active and which levels can act as important support or resistance. We can see huge Call OI buildup at 36000 and 2nd highest Put OI buildup at 35500 levels. So expected movement is between these levels for now and it is re-affirmed by Elliott wave analysis
This research shows how one can use this simple yet powerful method to trade any instrument.
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