Analysis and Trade Plan - 10 December 2019

  • As expected we had a sideways movement. I expect it to continue for one or more days.

  • India Vix increased by 7% yesterday.

  • Open Interest on Nifty future is historic low right now. Yesterday also we witnessed short covering.

  • 11980 is proving to be a resistance zone while 11900 is a support zone.

  • Weekly Max Pain drifted down to 11950 while PCR hovered at 0.76.

  • Monthly Max Pain is still steady at 12000.

  • We are sideways on daily charts.

  • We are still hovering between a support zone of 11880-11933. Breach of 11880 can test 11800 levels while breach of 12000 can again test higher levels. In all cases, sideways and random movement cannot be ruled out.

  • Max Call OI is at 12000. Max Put OI is at 11900. These both have to be watched carefully. Any shortcovering at these puts will give a volatile swing in either direction.

  • Option activity was subdued yesterday. Still 2.2 million OI addition was on put side.

  • 12050/12100 CE shed some OI which is strange. 11900 witnessed writing of 5 lakh contracts.

  • Which reminds me, we are sideways and trend can change to any side.

  • In monthly options too, 11600/11800/11900 added OI while 12100 and 12150 lost OI. This can be a warning sign.

  • Strange thing is that 12000 put has highest OI right now on monthly and those writers have not left position. They are still holding on. So we might not be that bearish right now and chances are real that we may reclaim 12000.

  • FIIs and DIIs were net positive with 533 cr.

  • Bank Nifty max pain moved up to 31700 and PCR at 0.73.

  • On monthly data max pain came down to 31500.

  • Call writing was only at strikes 31400-31900 while put writing was from 30300 to 31300.

  • Double the puts were added than calls.

  • My deduction is sideways market which can change to bullish any time.


Stock Selection

  • Maruti - At cross of 7000, buy a put of 7100, sell a put of 6900. Stop-loss is 7192.

  • Tataelxsy - Sell 840 put, Buy 820 put. Stop-loss is 840.

  • Tatasteel - If crosses 414, sell 400 put, buy 390 put. Stop-loss 408.

  • Reliance - Buy 1560 call 2 lots, Sell 1600 call 2 lots.


Rohit Katwal

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