Analysis and Trade Plan - 19 December 2019
I mentioned in my previous analysis that whichever way the OI picks up, market will move in that direction.
Dow Jones also inched higher yesterday but eventually gave up the gains.
Technically and Data wise, we are overbought right now and going ahead I expect little consolidation. Sustaining 12103 is key for this double top breakout.
SGX Nifty is trading flat right now so we may have a flat opening.
I have sold some 12300 CE and 12100 PE expecting consolidation. I am also carrying forward sold calls of 32700 and puts of 31700 on Bank Nifty.
On Nifty we had a day of Long Buildup.
Max Pain continues to move up at 12200. With this, I expect market to be expiring between 12150-12250.
PCR at 1.86 is little overstretched now and consolidation can happen.
India Vix further came down to 12.34.
Monthly Max Pain also moved up to 12150 and PCR at 1.5.
Puts of 12200 were max written yesterday. Unlike previous day there was some writing on 12200 calls also. 12200 happens to be strike with highest call and second highest put so fight to defend this level is inevitable.
12100 and 12200 calls were heavily written on monthly options citing strong underlying bull trend with some writing on 12300 and 12400 call levels.
Surprisingly a lot of call writers are still trapped at 12000 levels. I suppose they are straddle writers and still feel that market can come down from here. Only time will tell. If they started to run, then market can move up more.
Bank Nifty also had a long buildup. It was mainly due to movement in HDFC Bank which has bee stagnant for long time now.
Max Pain moved up to 32200 with PCR at 1.47 bullish.
Monthly pain is still steady at 32000 levels with PCR at 1.62.
32000 put saw writing while call unwinding was over all strikes. Little OI changed on OTM calls.
32000 seems to be actively written on monthly charts also with an upward writing till 33000 levels.
Bank Nifty did made an awkward candle on Daily charts lacking any strength.
After todays expiry, we will be in uncharted territory for Nifty and Bank Nifty.
I am trading with bullish to sideways expectations. I will be writing some intraday sideways calls and puts depending on the market movement.