Analysis and Game Plan - 14 November 2018
Market defied downside yesterday post a 2.32% fall in dow jones.
One has to be open to both bearish and bullish positions at such points. We can either break up or break down from resistance. Breaking down is a sign of continuation in bearish trend. Breaking up is trend reversal.
Based on SGX Nifty and yesterdays momentum, we may open little gapup today.
There is news of RBI injecting liquidity of upto ₹12,000 crores through OMO, which can lift the sentiment.
Crude Oil fell more than 6% yesterday. It may be good for India for now. Too much of bearishness is bad in its own way.
Rupee is also strengthening for now. There are no signs of further weakness.
Sentiments may seem positive, but as I have said many times, these are uncertain times due to up coming political events. So it is better to be cautious.
Weekly charts of Bank Nifty and Nifty looks scary. We still need more confirmation that trend is reversed to upside.
Nifty has an immediate barrier at 10640 which needs to be broken with momentum. For Bank Nifty, 25930 is crucial for any more upside.
Nifty witnessed short covering yesterday. There was no long buildup. Any continuation in trend needs fresh long buildup.
While PCR is bullish, Max Pain is steady at 10500 for some time suggesting consolidation and might break to upside if crosses 10640.
PCR for time when Nifty is revolving between 10500-10600 is around 1.18 which is bullish.
Bank Nifty witnessed long buildup yesterday. It was not massive but there were long added.
Max Pain is steady for some days now. PCR is also oscillating.
Collective PCR for last 3 days is bullish suggesting consolidation with bullish bias.
Conclusion - Trading with positive bias.
Game Plan -
No plan to disturb my Bull Put Spread of -20 X 25400 & +20 X 25200 unless I need to free up money for some other position.
I will execute 12 lots today for delivery.
I will wait for 45 minutes before taking a new position. We are opening above 25950. I need to see whether it will sustain or fail.
I might execute a put calender.
Here are my open positions: