Nifty Open Interest profile, Elliott Wave Trade Setup

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Nifty has been moving as per the GPS of the market extremely well. We have been talking about Lunar cycle and mentioned it as well in our previous article – Full moon topping cycle

Open Interest analysis and Elliott wave together along with Lunar cycles can be classic way to trade the markets.

Nifty 15 minutes chart: OI profile

Elliott wave - The rise after completion of wave (A) at the lows of 15190 levels has been in overlapping fashion. Majority turned bullish once Nifty broke above 16100 levels but only to trap the late entrants and now we are seeing the sharp fall. There is likelihood that the entire rise is complete and bigger degree wave (B) might be getting over with downtrend in form of wave (C) to start. We are now at the channel support and break below the channel along with 15800 can accelerate the selling pressure. We even tweeted across the bearish stand a day prior to 13^th July given the Lunar cycle as well. So there was classic confluence of Lunar cycle along with Elliott wave and Open interest change.

Open Interest Profile -  We can see sharp rise in call side Open interest near 16k suggesting that the put writers started squaring off their positions and call sellers became active. We can see that 15800 has some put sellers active and so it can act as minor support. At the same time prices are near channel support. So basis this information we are in Sell on rise market.

In a nutshell, combination of Elliott wave with OI profile and Time Cycles can be one of the best way to trade markets. Now breach below 15800 will accelerate the selling pressure with 16040 as major hurdle. So use pullbacks to sell calls or buy puts.

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