Analysis and Trade Plan - 23 October 2019
Dow Jones was slightly down yesterday.
SGX Nifty jumped till 11650 yesterday and then came back to normal levels.
Infy ADR was down 3%.
Bank Nifty is trending up right now, but ultimately it has to move in tandem with broader market.
Data is confusing on Nifty right now. 11710, was a classic cup and handle breakout pattern, but we had a failed break yesterday and I had to hit a stoploss. Throughout the day, Nifty gave many wrong signals and whipsaws before finally surrendering the gains.
Trend is still up on daily and 2 hourly charts. 30 minute charts which I primarily trade has turned sideways.
It can be a general retrace before an upmove till 11500 levels that is why I have created a 11500 straddle yesterday.
Nifty futures witnessed short buildup yesterday.
Option Data is bearish on weekly with call writing visibile at 11600/11650/11700/11800/11850 strikes while put writing was not there and put unwinding was witnessed on 11500 strikes. Which makes me wonder that we can breach it today.
On Monthly options also 11700 and 11800 strikes witnessed call writing while there was massive put unwinding on 11500/11400/11300 strikes. May be it is the infy effect.
India Vix also rose 5.5% yesterday which I take as an uncertainty signal. And possible upside for now.
For upside, I am looking at 11650 and downside at 11570.
FIIs were net sellers for 557 crores yesterday and DIIs were net sellers of 985 crores. Combined they were a seller of 1543 crores.
I am trading with bearish to sideways bias for now.