Pre-Market Analysis: Banknifty Future – 9th July 2020

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Observation from previous day:

On Wednesday, Banknifty opened just below PDH and broke PDH in open auction with open low.  It was clearly stronger than nifty and continued one time framing higher but there was a disturbance when E period broke D period low (which was a caution) but bulls bought this retracement and continued higher. Though I was talking about POC at 22950 in previous posts as first target, BNF clearly went above that and selling came from 23100 levels taking prices below IB low and back into previous day range. So, the upper target of POC is done for now.  

What can be expected now:

I am expecting banknifty to retrace and repair poor structures (poor lows at 22000 and 21770) but I am expecting Banknifty to be stronger than nifty in coming few days.  The overall trend for banknifty is up,  so after repairing these structures,  we can expect prices to break above the PDH (23120 level) which is also a poor high(less likely these all moves will happen today but is indication of what to expect in future)..

Trade plan for today:

I am bearish on banknifty for today but will only look for a short trade below PDL and only if prices are accepted below it. Nifty is weaker than banknifty,  so its advisable to look for a short trade in nifty rather due to weakness and smooth movement. Targets for downside in Banknifty would be virgin POC (22076),  poor low (22000), Prominent POC (21875) and poor low (21765). But since over all trade is bullish and I am looking for short term retracement,  I will be cautious if sellers show any exhaustion.

Some cautions:

  • First caution is expiry, So, need to be careful with trades and take lesser risk (lesser quantity today).
  • If Prices go down in speed, don’t try a FOMO trade as the rejection from buyers can be equally fast.  Best idea for short trades is to look for buyers exhaustion first and then go short.
  • Banknifty is expected to be little more volatile than nifty, so your stoploss might be taken out.  So, if you are trading Banknifty and prices move in your favour,  try to book partial profits fast or trail stoploss close.

Please note: This is a personal view for learning purpose and not a trading recommendation. Also, I would be updating post-market analysis and my today’s trades based on this pre-market analysis in the follow up post later.

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