Analysis and Trade Plan - 9 July 2019

• We are bearish for now. No doubt about it.

• I am expecting a little negative opening for the markets. A little negative opening will be good for my positions.

• We fell 250 and 850 points on Nifty and Bank Nifty respectively. With negative bias, I expect a little sideways movement now.

• Fall was attributed to various provisions in Budget related to taxing FPI's and increasing retail participation in equities.

• Nifty had a crucial support at 11600 which is broken now. We may drift towards 11100 levels where the 200 day moving average is.

• Future activity was very less on Nifty.

• PCR at 0.33 is super bearish and max pain fell by 250 points to 11650.

• Change in total call OI was 7 million yesterday with heavy call writing from 11600/11650/11700/11750/11800.

• Any bounce in Nifty is an opportunity to sell right now.

• Bank Nifty has a crucial support at 30200. It is the gap high. If broken may drift Bank Nifty more lower.

• Future activity in Bank Nifty was negligible.

• PCR at 0.42 is bearish and max pain moved down to 30600. Call writing was visible at all strikes with hardly and put writing.

• Any bounce will be sold into. Once market opens we will have fresh level to decide on where to short.

• I am trading with bearish to sideways bias.

• Optimum strategy will be to do a call calendar or a call ratio spreads for now.

Rohit Katwal