Analysis and Trade Plan - 5 August 2019

  • SGX Nifty is trading 80 points down as we speak. We can be sure of a negative opening for our markets.

  • Dow Jones closed in red on Friday.

  • Asian markets are bleeding right now with Hang Seng and Nikkei down 2% each. Not a good omen for our market.

  • There was some buying interest o Friday, but turns out it was a bull trap.

  • End of the day is what gives clarity on what the market is doing.

  • RBI monetary policy meet ends on Wednesday so we can see volatility going ahead.

  • Technically, Nifty is in downtrend on all time frames. We were in the process of forming Higher High, Higher Lows on smaller time frame but it will not sustain right now.

  • PCR at 0.78 is bearish and max pain is still moving down.

  • India vix touched 15.19 which suggest more bearish days ahead.

  • Given it was Friday, we did not witness any major option writing which can change today.

  • FIIs sold for 2888 crore while DIIs bought for 2812 crores.

  • So one can conclude that trend in Nifty currently is bearish. It will be wise to write Bearish strategies as of now as below 10850 we can touc 10500 also.

  • Bank Nifty is also technically bearish on all time frames. We saw some bullishness on Friday but it faded and quickly turned into selling within half an hour.

  • There was short buildup on Bank Nifty futures. We might be headed toward 27500 levels.

  • Option data for Bank Nifty is bearish with bearish PCR and max pain is also moving down.

  • Straddles were written at 28000 strikes suggesting a range of 27000 to 29000 for Bank Nifty.

  • Unless there is a dramatic shift in data continuously for 3 4 days, every rise is a sell opportunity. I will be doing some call calendars today on Bank Nifty.


Rohit Katwal


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