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.

Trading Plan

• 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.

Rohit Katwal