Analysis and Game Plan - 31 December 2018
SGX Nifty is trading 50 points higher today suggesting a positive bias.
Dow Jones shot by approximately 1800 points in last few session. On daily charts, it is still a retracement and trend is bearish.
Sentiment is revived due to perceived trade talks of US-China and trumps tweet regarding that.
Rupee is strengthening further and may break towards 68 level if 69.50 is broken which is good for us.
Crude Oil is not a worry right now.
Major event is of US Government shutdown and its resolution on 3rd January, which might be after our expiry.
On daily, 2 hourly and 30 minutes chart, we are bullish on Nifty and Bank Nifty. I would like to see Bank Nifty crossing 27240 to take a bullish position.
We are seeing a new pattern of vix. Despite below 16 we are experiencing volatility with positive bias.
Nifty pain has sharply moved up on Friday, suggesting bullish bias. PCR is also bullish.
Nifty Futures also witnessed long buildup.
Bank Nifty also witnessed long buildup on futures.
Pain is also moving up suggesting bullish bias with more put writing compared to call writing.
Conclusion: - Trading with bullish bias above 27240. 26847 is stoploss or is trade reversal point. Stoploss can be at 27045. Pre Market - We are opening at 27267, now I have to wait and watch if 27240 sustains for 1 hour after opening. Then will initiate a trade.
Game Plan: -
Planning to take some bull put spreads with mentioned stoploss.
Will likely hedge my losses with opposite naked option if trade moves in opposite direction after my entry.