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.