Nb. Our comment from the 01/17/22 (Not published)
Nb. Our comment on 01/24/22
We don’t think we can get away with not mentioning the end of the Jan expiry, especially as there was such a huge battle going on between derivatives and equities. And, we were anticipating a move up in the zone to 7350-7450 but, in the end, what we got was 7450-7550. So, the valiant R3 at 7550 that was such a thorn in the equities side in the final fortnight, did eventually capitulate, ending up as the upper boundary of the zone as well as R1. Meaning the EDSP of 7528.28 was actually in the new zone.
Furthermore, the huge levels of activity have continued on into the Feb expiry, so much so it has almost doubled the overall exposure that had been present, and in just one week. Which was rather fitting for an expiry that produced a 3.63% gain over the five-weeks of its length.
Therefore, it comes as no great surprise that the zone in Feb has ended up matching the Jan one, albeit one was at the end of its tenure while the other is just at the start of theirs.
How long will the market stay in its zone, who knows. But we hope it will be for this first week at least, if only just to let the dust settle.
If it doesn’t, then worth noting on the upside 7550 is now just Y2, so in reality, the fact it is the zones upper boundary will probably carry more weight than the level of dynamic delta produced by a Y ratio. The serious levels don’t start until 7650, and if it continues to be as aggressive as last week, then R3 doesn’t kick in until 7700.
On the downside, then what with the recent move up in the zone, it has left a huge amount of Y ratio below it, so the serious levels here don’t start until 7250. So, if you are a bull, then a week in its zone would be very beneficial as it might allow for the ratios down here to build up a bit.
Worth noting also Feb is the more regular four-week trip, and Jan also started their trip in their zone, although back then (20/12/2021) this was 7150-7250.
Range: 7450 to 7550
Type: On balance only just bullish