Last two days lot options activity has increased around the immediate support 5400 & immediate resistance 5500.
For last two days:
1. 5400PE OI increased by almost 21L. So 5400 is the first support (but can't say its a very strong support yet) with 68L puts vs 53L calls
2. 5500CE OI increased by 12L. So climbing 5500 would not be a very easy task.
3. Lower level puts keep getting added @5200, 5100, 5000 -- for hedging.
4. The pace of 5600CE addition has decreased -- after the 11L added on the Friday (22-16 price range), next two days has seen addition of only 5L addition (price range still 22-16).
Effectively last two days the two big money options bets were that market will not fall below 5400 and will not rise above 5500.
One should be monitoring 5600CEs everyday because @the price of 22-16 rupees is not pricing in any sharp upswing that can come if Global cues are good.
Nifty Futures:
3.02Cr OI up 9% -- we saw this in Banknifty last month -- Fairly big OI addition after several gap ups + small consolidation and then breakout. Will Nifty also follow the same path this month?
Banknifty Futures:
30.5L OI up 10% in last 2 days.
The Humongous OI is getting uncomfortable for me to digest. There sure is more room to run up and touch Banknifty all time high of 10700+ But there is no doubt in my mind that a 300+ point correction is coming in Banknifty. The question is whether we will touch 10700+ before the correction or after?
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