Analysis and Trade Plan - 20 December 2019

  • Nifty has given consistent uptrend after a long time on 30 minutes chart.

  • Yesterday also we witnessed long buildup on Nifty. So as far as big money is considered, they are building positions to upside. One thing to keep in mind is that we are at all time highs. If there is any big bearish day, that will cause change of trend very fast as at this point retailers will get trapped on top. So time to be cautious.

  • Monthly Max Pain moved up to 12200. PCR at 1.58 is also bullish. India Vix is at 12.12 so market is not expecting any large untoward volatility.

  • Max OI of 12000 finally shifted to 12300 Calls while on put side max OI is at 12000.

  • 12400 call was heavily written. 12200 put was also heavily written.

  • We are really into an overbought territory. Put side has OI of 30+ lakh everywhere where as calls are struggling to cross 15 to 20 lakh OI. It gives more chances of consolidation.

  • Strikes of 12200, 12300, 12400 should remain in focus for this expiry.

  • Problem is not the direction. Problem is low vix. There is absolutely no fear in the market so option premiums are very less.

  • Max Pain on Bank Nifty is also hovering around 32000 now. PCR at 1.29 is bullish.

  • 32000 put saw the maximum writing so it should hold as good support.

  • Call writing was on 32500 and 33000 calls so upside is also not ruled out.

  • I will trade with bullish to sideways bias.

  • ICICI Bank has been strong for quite few weeks now. HDFC Bank has also started moving to upside. Kotak Bank is also giving a daily upmove and resistance to downside. So this rally should hold.

  • At the end of day, I will assess what kind of data and trend is building to take position.

  • Since Wednesday is Christmas, its imperative that we take a trade to meet weekly target so my trades will be defensive.

Rohit Katwal


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