Trade setup for Wednesday 05, February 2020

All you need to know as a trader or Investor

Nifty had shown massive rally yesterday and followed the technical and moved high and high. In our yesterday technical setup we have mentioned about this rally why it has happened. For learning purpose you can go through our yesterday technical setup.

Sensex closed 917 points, higher at 40,789.38 while Nifty closed with gains of 272 points, at 11,979.65.

Global market data is also positive which good for Indian market too.

Trend on SGX nifty shows negative opening for Nifty, closed 18.50 points lower.

Like we said yesterday reaction of budget is over now and nifty is back to its path so all need to be more focused on fundamental and technical analysis.

Option Analysis:

Maximum open interest on call side at 12,500 of 19 lakh contracts.

Significant call writing was seen at the 11,900 strike price

Call unwinding was seen at 12,000 strike price.

Maximum open interest on put side at 12000 strike price of 24.38 lakh.

Put writing was seen at the 11,900 strike price 6.5 lakh new contracts gets added.

Put unwinding was seen at the 12,000 strike price.

What to look for:

As per above technical chart nifty is showing bullish and can go further up. If nifty manages to sustain above 12,050, then up move may extend towards 12,150–12,200.

Nifty can start with positive but there is possibility that it can bounce back from higher level so need to be very cautious. For more confirmation wait nifty to cross 12,000 for making any upside view for the day however overall trend is positive but need to keep in mind that tomorrow is weekly expiry for option segment. And in case nifty start falling after a certain up moves and breach 11,949 might be possible it can continue to in bearish for the day. So for day trade it is very important to look both the level and make decision accordingly.