Analysis and Trade Plan - 12 December 2019

  • I am expecting Nifty to expire between 11900 to 12000. It will be beneficial to see it expiring near 11940-11960.

  • Bank Nifty may expire between 31000 to 31600.

  • SGX Nifty is 40 point up as of now so we may see a little gap up.

  • Throughout the day Nifty was giving bearish signs. Later at end it suddenly turned.

  • Half a million of fresh OI was added on 11800-11850-11900 strikes with 11900 having the highest OI in puts.

  • 11900/12000 Calls witnessed call unwinding which is a danger signal. 12000 has highest OI so if it is breached, sellers may run to cover their positions.

  • On Tuesday ATM puts were unwritten and ATM calls were written which was bearish. Yesterday ATM puts were written and calls were unwinded which is bullish sign.

  • Futures also witnessed short buildup first and yesterday saw a long buildup. Till 12014 is crossed on Index, we cannot clearly say who is in control of the rally.

  • On monthly options, 12000 saw call and put unwinding while 11900 was written hinting at a straddle formation. 12000 is also the strike with highest call and put OI.

  • It is going to be a fight between 12000 CE and PE today.

  • FII and DII were net buyer of 845 crores.

  • Bank Nifty witnessed short covering rally.

  • PCR is bearish and looks like the action will remain between 30700-31700 strikes. If Nifty is bullish, then Bank Nifty will follow its lead.

  • 31000 put lost some OI yesterday which I suspect happened because it was breached. Due to sudden movement in last one hour there is no considerable buildup in Bank Nifty.

  • I am trading with sideways to bullish bias for now. Closing above 12014 will make us bullish and target to 12150 will be open.

Rohit Katwal

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