Analysis and Trade Plan - 22 October 2019

  • SGX Nifty is trading almost 50 points down today.

  • Dow Jones was slightly up.

  • Over the weekend we had some major development. Reliance came out with results which were above expectations and also lagging at some parameters. HDFC Bank came out with exceeding expectations results.

  • A group called ethical employee filed a complaint with SEC for wrong reporting of revenue by Infy causing a fall of 12% in Infy ADR. Its effect will be visible on Indian markets today. 10% fall in Infy can warrant a 60-70 point fall in Nifty as it is one of the index heavy weights.

  • 740 put has become the point of controversy in market right now with 18 Lakh in open interest for November expiry which many traders are dubbing to be insider trading activity related to SEC complaint.

  • It will be interesting to watch this development.


Nifty

  • Nifty Futures witnessed short covering rally.

  • PCR at 1.35 is bullish and max pain is also moving up.

  • Call writing was visible at 11700 and 11800 strikes while put writing was comparatively more at 11500 and 11600.

  • On monthly options also 11500 and 11600 witnessed high put writing.


On all time frames, trend is up. Given the confusion that has been created by results and news on Infy, we might consolidate for some time now. So it will be wise to take bullish positions with sideways bias. Also results have been good till now. It may remain good for rest of the countries too. So short term trend should remain positive.


Rohit Katwal



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