Analysis and Trade Plan - 24 January 2019

Finally we gave into the resistance that was playing in for last few weeks. It has been a tough week. We were in a very tight range. One has to keep his mind open on direction despite data: price action is ultimate because in weekly expiry, data can be wrong. When market hit the bottom of 27400, I went long. Along the way, I shifted my positions many times. Some gave me profit and some gave me loss but overall positions were comfortable. Data along the way was suggesting either consolidation or distribution. I think as the budget day is approaching, we will face uncertainty.

Bank Nifty

Technically

• We have officially entered a sideways phase on daily charts.

• Close below 27150 can be the start of down trend for formation of Lower Lows.

• We are bearish on 2 hourly charts.

• We are bearish on 30 minutes chart.

• Its first time after many weeks that the selloff has been intense which means it is going to stay.

• India Vix jumping to 18 was a clue that sell off might come. But it was coupled with margin increasing news, so I ignored that.

Data Analysis

• Activity on futures was subdued.

• Call writing was intense. Max OI is at 27500 suggesting we won't close above that point for now.

• Tomorrow we may see expiry between 27000-27300.

• All my positions are good below 27600, and I think we won't touch that point tomorrow.

• Pain has moved down to 27300. PCR is at .63 and has came down finally.

• If by any chance we open gapup tomorrow, I will exit my positions and will be done.

• If gap down, then I will hold till expiry.

• If normal opening then I will wait for an hour. If day high is broken at any point, I will exit.

Nifty

Technically

• We are sideways to bullish right now. One day of fall does not constitute a trend change. It changes slowly. It has to trade below 10800 for some time for confirmation.

• On 2 hourly basis we can see some support at 10800. If that is gone, then we can see 10700.

• Upside remains intact at 11000.

• On 30 minutes we are bearish and we have what seems to be a head and shoulder.

Data Analysis

• Surprisingly on Nifty also, we did not have any short addition. OI is intact.

• Pain is intact at 10900 and PCR is sideways at 1.11.

• We saw huge call writing of 1 million each at 10900 and 11000. Few days back we had put writing, which was being unwinded for last few days.

• Right now, we are short term bearish.

Conclusion:

I am currently keeping sideways to bearish bias.

21 January 2019 - 24 January 2019.xlsx

Rohit Katwal