Analysis and Trade Plan - 9 September 2019
Technically, we are squeezed in between the range of 11180,11135 and 10630, 10750 on Nifty. Similarly Bank Nifty has a range of 28000 to 26500 for now. Trend is sideways to bearish on daily charts.
Nifty did show some bullishness on 30 minute charts, but Bank Nifty was sluggish and stayed in range. Monday will at least give some clue of what is happening.
Nifty and Bank Nifty futures witnessed short covering rally.
Max Pain is steady and PCR for Nifty at 1.21 is little bullish. We need to see if it sustains. For Bank Nifty PCR at 0.91 is still sideways.
India Vix dropped by 5% on Friday. There might be some reprise from this volatility in coming days. Also premiums were little less compared to normal days. Might be hinting at some bullish days ahead.
Collectively 2.5 million OI was added to 10750 to 10900 puts. Calls only witnessed OI of 1 million from 11000 to 11200. Right now bulls seem to be more active.
10900 and 10800 puts witnessed OI addition on monthly expiry with call unwinding on 10900, 11000, 11100 strikes. I think we have formed a temporary bottom for now at around 10800 levels.
Bank Nifty holds maximum OI at 26500 Put and 28000 Calls. That should hold the range for this week.
Put writing on Bank Nifty was more compared to any call writing. Overall the strength was neutral. 9 Lakh OI was added to calls and 10 lakh to puts suggesting a sideways movement for now. Hence, we need to see what is the activity on Monday to deduce further direction.
Monthly OI data of Bank Nifty is also hinting at a sideways movement for now with 27500 and 28000 acting as upper resistance zone and 27000 and 26500 acting as support zones.
I am already holding 26300 Puts and 28100 Calls which I dont intend to alter.
There is no direction to this market, so I might end up doing a strangle on Nifty, but will initiate any trade after 11:30 am.
If the trend in Intraday is strong with heavy Open Interest, I might take a directional trade. It is too early to comment right now.