Analysis and Trade Plan - 28 August 2019

  • As expected SGX Nifty is in sideways phase with other global indices. After such a powerful rally without any retracement, some sideways movement was expected.

  • Nifty and Bank Nifty witnessed long buildup.

  • Weekly pain on Nifty moved up to 11100 and Bank Nifty to 28000 while monthly pain is steady at 11000 and 28000. If index were to expire at these strikes then it will be maximum beneficial to me.

  • PCR at 1.13 for Nifty is getting bullish while for Bank Nifty it is at 1 hinting at some sideways bias.

  • Maximum call open interest is at 11200 and put open interest is at 11000 which can be expected range right now for current expiry.

  • Maximum call writing happened at 11300 followed by 11200 and max put writing at 11000 and 11100. Right now total Call OI of 11100 is more than Put OI. If that were to change today then we might expect rally to upside and potential break of 11200. So I will keep an eye on 11100 strike keenly.

  • Bank Nifty closed at 28100+ and there seems equal power distribution at calls and puts. Strength is coming at 28000. A lot of calls were written at 28500 too.

  • Finance ministers in her Friday speech mention that there will be two more announcement in the coming week. I wonder if 1 announcement can be today after market hours. Will have to be cautious with over night positions.

  • USD INR strengthened by 50 paise and can give booster shot to Indices, so will have to be cautious.

  • I said, that my breakeven point is 27620 - 28380 on some positions. If market breaks to upper side, then I plan to 28100 extra puts which will push my break even to upper side. Similarly if market breaks to downside then I will write some 27900 calls .

  • I have a call calendar which has shed some time decay and is in profit. With sideways opening, it may shed more time value. If yesterdays high on Nifty is breached and if 11100 attracted put writing, I will cover it at profit and write some put calendar in its place or a strangle.

  • I have also written some strangles which should do fine as I dont expect a big rally to either side. I expect consolidation with volatility.


Rohit Katwal

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