Market Setup – 28th June –

Today is the penultimate day of June series. NIFTY finally broke that 9575 to 9678 range that it was in from 26th May, yesterday. Everyone was expecting a break out but what we saw was a break down. NIFTY broke on the down side and NIFTY ended at 9510 yesterday down from that range. Today the opening will be below 9500 at the crucial level of 9480. Yesterday I was talking about holding 9480-9520 level and that level becomes crucial again.
Yesterday shorting on calls started aggressively at 9500 with many traders seeing the bearish sign wanting to eat the 9500 premium also. Now many traders have eaten the 9700, 9600 premium and now they are eyening 9500. 9700 premium fell from 11 rupees to 2 rupees yeterday, 9600 call premium from 40 rupees to 9 rupees! What is shocking is 9500 premium which was 110 rupees at yesterday’s start fell to 42 rupees by closing. Traders are still eyeing this premium and are heavily shorting it. This resulted in calls being more than puts for the first time in 6 months and put call ratio is now at 0.98 down from 1.01 seen yesterday. Sure bearish sign.
Today could be the day for 9480-9520 battle and heavy shorting will be seen at 9500 call and that 42 rupees is something that people would eye on. But going contra by shorting 9600 put at 90 rupees is not a bad idea but for that you need to have high risk appetite. Otherwise buying calls/puts chasing momentum and risking premium loss is the only option left!