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.

Rohit Katwal