Intraday Trend Analysis and Trading Plan for January 12, 2023!

The market opened flat and Selling pressure continues today also. Nifty hit the downside target of 17817 but still facing support from here.

A breakdown from 17817 will drag it into the reversal zone of 17817 – 17656 (based on the Fibonacci retracement tool)

In the Nifty500 index, 236 stocks are advanced, 258 are declining, and 7 are unchanged, indicating a neutral trend for today.

So overall trend looks neutral today with a bearish short-term sentiment.

Intraday Trend Analysis Based on the chart

• Nifty has given a breakdown from 18070 but hit the next downside target of 17817.
• But keep a range of 17817 – 17565 on the radar because it’s a reversal zone (50%-61.8%) based on the Fibonacci retracement tool. So don’t go aggressively on short until nifty is holding 17565. Below 17565 trend will change to completely bearishly. 
• In BankNifty, After a breakdown from 42555, Now it is heading towards a downside target of 41555. On the Upside 42555 is acting as the resistance now. So the range for coming sessions is 41555 – 42555. Only a breakdown or breakout will trigger further levels for coming sessions.

Based on short-term trends we should focus on range-bound strategies only. Increasing IV also gives a good opportunity to deploy some credit spreads with neutral views like iron Condor or butterfly. 

Intraday trend analysis based on OI data

• For Nifty: 17700 is acting as immediate support with a PCR at 10.87 and resistance has shifted to 17900 from 18000 with a PCR at 0.27. Max pain is at 17900.
• For BankNifty: 41800 is acting as immediate support with PCR at 3.86 and 42100 as immediate resistance with PCR at 0.45. Max pain is at 42000.
• Expiry Range: 
  • For Nifty = 17700 – 17900.
  • For BankNifty = 42200 – 41800 ( based on current oi data. Keep following change in Oi for further levels)

The intraday trend is “Highly Bearish” in both indices. (based on our trend-following sheet and setup) 

Trading Plan for Today

Despite of Bearish trend in both the indices, I have created neutral trade in both due to weekly expiry: 

• In Nifty, I have Shorted GUT with 17700 & 18000 strikes
• In banknifty, I have created a beamish trade by selling 42400 CE & 42500 CE.

A new batch of Mentorship Program 3.0 started on January 15, 2023. You can enroll if you want to learn how to trade with rule-based option strategies with proper adjustments. Details are at: https://courses.tradepik.com

DISCLAIMER: We are not SEBI research analysts. Views and trading strategies are posted in this weekly market newsletter only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline for interpreting specified analysis methods.  This information should only be used by investors and traders aware of the risk inherent in securities trading.