Analysis and Trade Plan - 11 November 2019

  • I shifted my trades to end of day time frame due to increased volatility in Intraday. Often times it is meant to hit the stoploss.

  • On Friday, I executed following strategy.

  • The strategy has a risk reward ratio of 1:4 approximately so I am comfortable if Nifty revolves here and there around 11900.

  • Nifty futures witnessed long unwinding after few days of buildup.

  • PCR at 0.75 is bearish and Max Pain is also at 11900 for now. Monthly Pain is hovering at 11800 and needs to move up for further upside. Since the datai s bearish on weekly and PCR with 1.21 is bullish on Monthly, I am expecting a sideways movement for few days.

  • Strikes at 12000, 12100 witnessed strong call writing. While 11900,11950,12000 witnessed little put unwinding.

  • Total of 68 Lakh fresh OI was added on weekly charts, with 56 Lakh added to call side and rest to puts. So we are bearish for short term.

  • In all of this, we cannot speculate how the Ayodhya Verdict and Moody's downgrade or Maharashtra Verdict will affect the markets. That can be seen by end of day only.

  • Monthly data is still bullish to neutral with 1.5 lakh OI added to 11900 puts and 1.2 lakh OI added to 12000 calls.

  • In November, we can have a range of 11600-12000, while on weekly options we may have a range of 11800 to 12000 hence I feel positioning at 11900 can be a good choice.

  • Bank Nifty has been witnessing continued long buildup.

  • PCR at 1.32 is bullish with Max Pain at 30600.

  • Put writing was evidently more compared to call writing. Calls were written on 31100, 31200 strikes while puts were written on 30000, 30200, 30300, 30400, 30500 strikes. So if Nifty is bearish then Bank Nifty has a bullish bias which can again help in a sideways market.

  • I plan to do some hedged trades by end of day. Market makers have increased the intraday stoploss hunting and volatility to hit the stoploss so it is better to stay away from whipsaws.

Rohit Katwal

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