Trade setup for Thursday 06, February 2020

All you need to know as a trader or Investor

Nifty closed in green consecutively three days in row due to global market positiveness and for short term at least nifty seems to be positive however we can see some range bound trade in nifty and it may be trade between 12,000 to 12,150 today.

SGX nifty also closed lower by 28 points on 05 February which shows negative opening for nifty or flat opening is possible.

RBI policy announcement is scheduled

Option Analysis:

Maximum open interest on call side at 12500 of 21 lakh contracts.

Significant call writing was seen at the 12,400 strike price

Call unwinding was seen at 11,900 strike price.

Maximum open interest on put side at 12000 strike price of 28 lakh.

Put writing was seen at the 12,000 strike price 4 lakh new contracts gets added.

Put unwinding was seen at the 11,400 strike price.

What to Look For:

The Relative Strength Index (RSI) on the daily chart show above 50 which means nifty is in bullish trend however some correction cannot be ruled out from the higher levels so need to be very focused on today's RBI policy if that will be positive but if that goes negative by any mean we can see sharp fall again though it will be for short time frame.

So better for today is protect all your profit at higher levels keeping in mind that today is also expiry day. Do not keep any of your position for overnight.

If nifty managed to cross 12100 level we can be positive for nifty but if it goes down which is expected today as nifty is trading in green form last three days some correction is highly expected. so make your view bearish only if nifty breaches 12,030.

Broader view for nifty is bullish because all the up move with high volume so it is note fake move hence nifty should rally after short correction.

Disclaimer: All the information shared only for learning purpose, we do not provide any tip or recommendation. Please do consult with your investment adviser before making any trade or investment decision.

Stockgeni