Analysis and Trade Plan - 6 November 2019

  • We have almost hit the previous high post October in last few trading sessions. For last two days momentum has slowed down.

  • Bank Nifty has been a serious laggard for last couple of weeks. It is stopping Nifty from gaining momentum.

  • On daily and 2 hourly charts we are bullish but have turned sideways on 30 minute charts.

  • Future OI after a long time witnessed some short buildup but given the rally it is too early to tell.

  • Weekly speculation is low. I track Nifty and Bank Nifty only so I can say that we are trading at half the normal OI on Nifty and Bank Nifty. It can also be a pre cursor to come out of consolidation phase. Tilt is from sideways to bearish. A massive OI can change that.

  • Activity on monthly options is also dim. It looks like market is awaiting some kind of trigger.

  • Yesterday, FIIs were net buyers of 474 crore whereas DIIs sold for more than 1500 crores.

  • Vix has dropped below 15.90 which is considerably low. Low vix is bad for option sellers so there are expectations after the sideways movement that it can rise. Volatility bursts can be expected.

  • I am expecting market to expire somewhere between 11800-12000 or near 12000 tomorrow so my positions are according to that scenario. Although all positions are hedged, in case of a volatility burst, I might consider hedging further.

Rohit Katwal

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