Analysis and Trade Plan - 23 July 2019

• Another day of mayhem in Bank Nifty, although Nifty was not that violent. HDFC Twins were the culprit. Despite that, Yes Bank was the most traded share yesterday.

• Kotak Bank is also to be blamed and fell 2.9% for the day. We hit -600 at one point and I was thinking if we will hit -800 today also.

• RBL bank has also fallen from 700 to sub 500 levels. Something is cooking and things does not seem right.

• Kotak Bank missed the estimates yesterday, so it is to be seen how the share will react once the market opens.

• Investors everyday are looking for some positive news and everyday government is coming out with announcements not to their liking.

• If not for Reliance and TCS, we would have fallen by 100 points on Nifty today.

• Auto Stocks are down by 40-50% from the peak. It can be time for bottom fishing right now. I have a fixed amount which I invest every month. I dont look at technical, but once I like a stock for long term, I buy it. If it goes down, I keep on averaging every month till it moves above my price range. I think its time for me to start accumulating auto stocks.

• SGX nifty is hinting at a sideways opening.

• Dow Jones was little changed yesterday.

• Over the coming few days, Iran - US problems can increase further which can derail the markets and crude oil.

• Call writing was evidently more than put writing. Max Pain is moving down. PCR at .71 for Nifty is suggesting a bearish trend, but momentum may fade now as put writing is also coming.

• 11300 and 11200 can provide support. In the short term going into August, we may touch 11000 also.

• For Bank Nifty also shorts are being added.

• Call writing was visible on all counters. We might take support at 29000.

• We cannot rule out little consolidation before moving further down and hence my decision to do strangles yesterday.

• Currently, I am trading with bearish bias.

Trade Plan

• I am expecting a sideways opening for market today.

• I would wait to see what kind of day is unfolding till 11:15 am and decide accordingly.

• If there is a goo bounce, I might do some bear call spreads. If there is a good fall, I might do some bull put spreads. If market remains sideways, I am planning to do calendar or an iron fly.

Rohit Katwal