Rohit SinghAnalysis and Trade Plan - 22 July 2019
Today I am late for my analysis, but I was not concerned because I did not have any open positions.
Nifty has opened with a gap down and already fallen to 80 points.
Bank Nifty opened with a gap down and alreaddy fallen to 360 points.
Governments statement on no relief for FPI's has turned the sentiment bearish.
Majorit of small cap and mid cap stocks are already trading near or below 200 DMA. We can go for a bearish turn from here on.
Finally, India Vix has started to rise. Which means premiums will rise and so does the volatility. Little volatility can be good. Excessive can hit stoploss.
Till now, Reliance has not fallen with the market. If it does, results could have been catastrophic.
Results of HDFC Bank were within the estimates and that caused the profit booking. It is already 2% down and major reason for Bank Nifty being down.
Right now, markets are in very dangerous zone. Nifty has given a straight fall of 350 points. Bank Nifty has given a straight fall of 1400 points which calls for a technical bounce and market is oversold. But we can remain in oversold period for an extended period of time.
I am sitting outside markets waiting for a good opportunity to jump in. I won't recommend bottom fishing right now.
On Nifty, we may be headed towards 11100 levels and Bank Nifty might be headed to 28500 levels. So entry, exit and strategy needs to be precise right now.
Game Plan
I will wait for market to settle till second half of the day.
If there is a decent bounce, I will use it to write some call ratio spreads.
If going by the trend of -477, bank nifty heads towards -650 levels, I might do a call calendar at 29500 levels.
Premiums have increased so I might go for a bear call spread also.
Rohit Katwal