July 14/25

Global
  • Dow closed +500 points (2.5%) yesterday.
  • HongKong, China markets are down.
  • Dow Futures are positive by 200 points. DAX, FTSE are positive by 0.5% or so.
  • SGX is in green with 70 odd points.
Option chain
  • There was massive PE unwinding on 10600 strikes and above. But interestingly, also on 10300 and some strikes below...
  • There was writing on 10600CE and strikes above. Massive 22L writing on 10700 CE.
  • ATM strike is 10600. The net premium is 162.4. So the range is 10437.6 to 10762.4

  • Similar to this was Nifty Bank. It had writing on 21500 CE and unwinding on 21500 PE and all strikes above.
  • Net premium for 21500 is 621 premium. 20879 to 22121.

  • PCR is extremely low in Nifty Bank at 0.48
FnO Data
  • FIIs have added huge short positions in 20k Index Fut.
  • The data is extremely bearish.

Charts & technicals
  • On the daily timeframe, Nifty has support of 20DMA at 10472
  • Nifty Bank has although broken support of 20 DMA yesterday which is at 21785. 50 DMA is at 20373. 
Plan for today
  • With tomorrow's expiry premiums are too high. We may be in for some decay today.
  • FIIs have turned net negative. It's a significant change but DOW has changed the game a little bit last night. Need to watch out if there's significant shortcovering.
  • Carrying long had a better risk reward yeterday but needed a lot of guts. Today, if we open with a big gap up - might just need to sit out till the second half.
  • PCR is extremely low. i.e. 0.48 - need to watch out there also as this low PCR leads to shortcovering.
  • There's Reliance AGM today at 2PM. Need to watch out on news based action.
  • Can be a volatile day with decay.


     

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