Analysis and Trade Plan - 23 October 2019

  • Dow Jones was slightly down yesterday.

  • SGX Nifty jumped till 11650 yesterday and then came back to normal levels.

  • Infy ADR was down 3%.

  • Bank Nifty is trending up right now, but ultimately it has to move in tandem with broader market.

  • Data is confusing on Nifty right now. 11710, was a classic cup and handle breakout pattern, but we had a failed break yesterday and I had to hit a stoploss. Throughout the day, Nifty gave many wrong signals and whipsaws before finally surrendering the gains.

  • Trend is still up on daily and 2 hourly charts. 30 minute charts which I primarily trade has turned sideways.

  • It can be a general retrace before an upmove till 11500 levels that is why I have created a 11500 straddle yesterday.

  • Nifty futures witnessed short buildup yesterday.

  • Option Data is bearish on weekly with call writing visibile at 11600/11650/11700/11800/11850 strikes while put writing was not there and put unwinding was witnessed on 11500 strikes. Which makes me wonder that we can breach it today.

  • On Monthly options also 11700 and 11800 strikes witnessed call writing while there was massive put unwinding on 11500/11400/11300 strikes. May be it is the infy effect.

  • India Vix also rose 5.5% yesterday which I take as an uncertainty signal. And possible upside for now.

  • For upside, I am looking at 11650 and downside at 11570.

  • FIIs were net sellers for 557 crores yesterday and DIIs were net sellers of 985 crores. Combined they were a seller of 1543 crores.

  • I am trading with bearish to sideways bias for now.

Rohit Katwal

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