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.

Rohit Katwal

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