Analysis and Trade Plan - 12 December 2019
I am expecting Nifty to expire between 11900 to 12000. It will be beneficial to see it expiring near 11940-11960.
Bank Nifty may expire between 31000 to 31600.
SGX Nifty is 40 point up as of now so we may see a little gap up.
Throughout the day Nifty was giving bearish signs. Later at end it suddenly turned.
Half a million of fresh OI was added on 11800-11850-11900 strikes with 11900 having the highest OI in puts.
11900/12000 Calls witnessed call unwinding which is a danger signal. 12000 has highest OI so if it is breached, sellers may run to cover their positions.
On Tuesday ATM puts were unwritten and ATM calls were written which was bearish. Yesterday ATM puts were written and calls were unwinded which is bullish sign.
Futures also witnessed short buildup first and yesterday saw a long buildup. Till 12014 is crossed on Index, we cannot clearly say who is in control of the rally.
On monthly options, 12000 saw call and put unwinding while 11900 was written hinting at a straddle formation. 12000 is also the strike with highest call and put OI.
It is going to be a fight between 12000 CE and PE today.
FII and DII were net buyer of 845 crores.
Bank Nifty witnessed short covering rally.
PCR is bearish and looks like the action will remain between 30700-31700 strikes. If Nifty is bullish, then Bank Nifty will follow its lead.
31000 put lost some OI yesterday which I suspect happened because it was breached. Due to sudden movement in last one hour there is no considerable buildup in Bank Nifty.
I am trading with sideways to bullish bias for now. Closing above 12014 will make us bullish and target to 12150 will be open.