Analysis and Trade Plan - 8 July 2019

  • Budget had a negative reaction on Nifty as it fell 140 points. Bank Nifty was not much changed.

  • I will not go into what was good and what was bad as market has its own way of reacting to good and bad news and rather focus on what the charts and data is saying.

  • Crude Oil and INR are at firm footing. Both are in comfortable level as far as India's fiscal deficit is concerned.

  • Rising rupee may be a concern for IT companies. But will help fiscal deficit target of 3.3% issued by government.

  • Fresh shorts were added to Nifty on Friday. Technically, we are still in sideways phase of market. I expected post budget breakout or breakdown, but it didn't happen.

  • Despite heavy fall on Friday, Nifty Max Pain is steady at 11900.

  • Heavy call writing was done on 11900/12000/12050/12100 calls. Atleast these levels will act as a crucial resistance this week.

  • PCR is at 0.43 which is too early to conclude bearish trend right now.

  • There was no speculation on Bank Nifty with a lot of call writing. We need one more day of activity to deduce whether selling pressure is coming or not.

  • Since, market has already opened 1% down while I am writing my analysis, I will wait till 11:15 to decide on direction.

  • The kind of movement and range we had formed, I would like to be in a sideways direction. I would like to take positions, where there is a chance that it can go against me. I would be ignoring bull put spreads or bear call spreads for now.

  • My positions may be tilted towards bearish sentiment. It is definitely no time to go bullish.

  • Break of 11600 will be decisive and we can get a breakdown below that level.

  • Below 31100 levels, we can again drift towards 30300 levels.


Rohit Katwal


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