Analysis and Trade Plan - 5 March 2020

Yesterday by 12:00 pm market was almost stagnant and I made an exit from all my open positions. When market gave a break to downside I created following positions:

  • +11200 PE, -11150 PE for a max loss of 20 and max profit of 50. The spread reached a profit of Rs. 10. My intention is to hold on to a winning position. But then we had a spectacular reversal of 150 point and I had to exit this position at ₹3 profit only.

  • -11400 CE, +11500 CE was at profit but I had to exit at loss in reversal due to volatility. The kind of reversal that came was a rejection to downside 2nd time. American futures were positive and other global markes were doing okay so I reversed the position to -11050 PE, +10900 PE. I am hoping to cover it at profit today.

  • Since the trend is volatile and sideways on 30 minutes charts, I sold 11450 CEs also.

  • I am still holding on to -29200 CE, +29500 CE. If there is a gapup of 200 points than also it is manageable. Bank Nifty is much weaker compared to Nifty. Nifty at these levels is taking support.

  • Coming back to today:

  • Dow Jones closed 4.5% higher yesterday due to win of Joe Bidin for presidential elections. His policies are not negative about corporate and billionaire as compared to Bernie Sanders.

  • Other global markets are trading in positive.

  • SGX Nifty is little down but I reckon we will remain sideways to bullish for the day. New corona virus cases in India are creating volatility so my try will be to exit positions in profit where ever I can.

  • As far as data is concerned there is no logical deduction right now. It is big money that is moving the market with fear and panic and nothing can be deduced from it.

  • Max Pain is steady at 11300 so I expect market to expire within the range of 11200-11400 somewhere. This can be wrong and is a mere speculation.

  • Yesterday vix spiked by 5% and then cooled. That was also a reason for taking a bullish trade on Nifty.

  • On weekly options there was a lot of put unwinding and call writing which calls for a bearish trend. So I will be very cautiously looking at 11200 levels. If it starts to break, then all analysis aside, market will drift lower. Global market is higher but it is due to political factors. In India it is the corona virus that is moving the market right now.

  • Bank Nifty option data is also bearish so one needs to be cautious. If 29000 is broken the upside can come.

  • To conclude, while we are bearish, on the day of expiry I am trading with mind open to both sides. Data is bearish but global markets are positive. Bearish trend does not mean we cannot have a bullish intraday trend. So I will be keeping a close eye on 11200 and 11300 strikes on Nifty and 28500 and 29000 strikes on Bank Nifty.

Rohit Katwal

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