Analysis and Game Plan - 14 November 2018

  • Market defied downside yesterday post a 2.32% fall in dow jones.

  • One has to be open to both bearish and bullish positions at such points. We can either break up or break down from resistance. Breaking down is a sign of continuation in bearish trend. Breaking up is trend reversal.

  • Based on SGX Nifty and yesterdays momentum, we may open little gapup today.

  • There is news of RBI injecting liquidity of upto ₹12,000 crores through OMO, which can lift the sentiment.

  • Crude Oil fell more than 6% yesterday. It may be good for India for now. Too much of bearishness is bad in its own way.

  • Rupee is also strengthening for now. There are no signs of further weakness.

  • Sentiments may seem positive, but as I have said many times, these are uncertain times due to up coming political events. So it is better to be cautious.

  • Weekly charts of Bank Nifty and Nifty looks scary. We still need more confirmation that trend is reversed to upside.

  • Nifty has an immediate barrier at 10640 which needs to be broken with momentum. For Bank Nifty, 25930 is crucial for any more upside.

  • Nifty witnessed short covering yesterday. There was no long buildup. Any continuation in trend needs fresh long buildup.

  • While PCR is bullish, Max Pain is steady at 10500 for some time suggesting consolidation and might break to upside if crosses 10640.

  • PCR for time when Nifty is revolving between 10500-10600 is around 1.18 which is bullish.

  • Bank Nifty witnessed long buildup yesterday. It was not massive but there were long added.

  • Max Pain is steady for some days now. PCR is also oscillating.

  • Collective PCR for last 3 days is bullish suggesting consolidation with bullish bias.

Conclusion - Trading with positive bias.

Game Plan -

  • No plan to disturb my Bull Put Spread of -20 X 25400 & +20 X 25200 unless I need to free up money for some other position.

  • I will execute 12 lots today for delivery.

  • I will wait for 45 minutes before taking a new position. We are opening above 25950. I need to see whether it will sustain or fail.

  • I might execute a put calender.

Here are my open positions:

9 November 2018 - 15 November 2018.xlsx

Rohit Katwal

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