Analysis and Trade Plan - 3 October 2019

• So euphoria over corporate tax cut is over now and trouble with banks is again rattling the markets.

• On Tuesday, following our markets, dow collapsed by more than 300 points.

• RBI had to issue a statement on Tuesday to assure depositors that Indian banking system is stable.

• SGX Nifty was -0.90% on Wednesday.

Nifty

• In my analysis on Tuesday, I mentioned that we are bearish and I used the initial jump to get out of my bullish positions. Still I got caught into one of my sold puts.

• Nifty futures witnessed huge short buildup on Tuesday.

• PCR is at 0.56 and pain is moving down.

• Collectively on Options, there was a change of 5 lakh contracts. But put were unwinded to the tune of 22 lakh and calls were written to the tune of 27 lakh.

• Immediate OTM PCR is also at 0.44

Bank Nifty

• I am not trading bank nifty these days as it has become too much volatile.

• There was huge short buildup on Bank Nifty in last two days.

• Max pain is moving down and PCR is at 0.40 suggesting bearishness.

• There was clear put unwinding and call writing on all strikes.

I will use the gap down or negative momentum to exit my 11600 CE at profit. I will do some intraday trading but with very less volume and in later part of the day.

Rohit Katwal