Analysis on 16 December 2024
1. Crude Oil Monthly Range
Identified range: 5800 to 6200. Current trading range aligns with the observed data, indicating a relatively neutral to slightly bullish outlook.
2. Call Side Analysis
- Top Volume Levels:
- 6000: Maximum call volume indicates significant activity at this level, showing strong interest in this strike.
- 6100: The second-highest volume level suggests continued bullish sentiment above 6000.
- 6200: The third-highest volume highlights a potential resistance zone at the upper end of the monthly range.
- Top Open Interest (OI) Levels:
- 6000: Highest OI indicates strong resistance, as traders are likely hedging or expecting the price to face difficulty breaking above this level.
- 6100: The second-highest OI level confirms additional resistance near this strike.
- 5900: The third-highest OI level indicates possible support close to this level, which aligns with the put data.
Inference: The 6000 level is a significant resistance point, with substantial trader activity and open interest clustering around this strike.
3. Put Side Analysis
- Top Volume Levels:
- 6000: Maximum put volume indicates strong interest in this strike, suggesting traders are protecting positions or expecting price stability near this level.
- 5900: The second-highest volume level aligns with potential support below 6000.
- 5800: The third-highest volume suggests additional downside protection, marking the lower bound of the monthly range.
- Top Open Interest (OI) Levels:
- 6000: The highest OI confirms this as a critical support level, reinforcing the importance of this strike in the current market sentiment.
- 5900: The second-highest OI supports the possibility of a bounce near this level.
- 5800: The third-highest OI strengthens the lower boundary of the identified range.
Inference: The 6000 level serves as a key support zone, with significant interest from put writers and buyers, while 5900 and 5800 act as secondary levels of support.
4. Key Observations
- 6000 as Pivot: Both call and put data identify 6000 as a crucial pivot level, serving as resistance (call side) and support (put side). Market sentiment around this level is mixed.
- Resistance Above 6000: Significant call volumes and OI at 6100 and 6200 suggest strong resistance above 6000, capping upside potential in the near term.
- Support Below 6000: High put volumes and OI at 5900 and 5800 suggest support levels below 6000, limiting the downside.
5. Conclusion
The 6000 level will likely dictate short-term movements, acting as a pivot. Price action around this level could signal breakout or breakdown possibilities.
Trading Strategy:
- Bullish Bias: If crude oil sustains above 6000, a move towards 6100 or 6200 is possible, with resistance likely at those levels.
- Bearish Bias: If crude oil falls below 6000, look for support at 5900 or 5800 before further downside.
