Students are confused when they need to visualise what is the direction of the particles the next moment of the wave. There is a simpler way solve such question.
Solutions: Option C
Consider positive displacement if the particle P is above the undisturbed position, and negative displacement if the particle is below the undisturbed position.
The next instance, the particle P will be moving vertically downwards, i.e. moving nearer to its undisturbed position. So the displacement decreases to zero before it moves below the undisturbed position (negative displacement).