Observation from previous day:
As expected from previous analysis (https://onerighttrade.com/index.php/2020/07/20/pre-market-analysis-nifty-future-20th-july-2020-2/), Nifty was bullish on Monday. It opened above PDH, tested PDH and got rejected thus giving a OTD up (Open test drive up). There was some struggle with nifty probing the prices in the gap zone (see chart on previous day’s analysis for indication of gap) and then it started moving sideways. We had warned against shorting nifty and prices got accepted comfortably above PDH. Before the final up-move, there was a stop-loss hunt below IB low which gives more confidence to bulls.
What can be expected today:
With a new swing high, we are bullish in nifty and we expect prices to go further up. In case Bulls decide to take prices up, 11230 level can be reached( so its almost a 200+ points possibility in nifty). The only issue is trade facilitation was not good by bulls but we will give them benefit of doubt for now. The view will change if prices start accepting below PDL (10920) levels. Third option is that prices can open open inside range and can move sideways, this would indicate pending business in 10920 to 11020 zone and we will not look for any trades in that case.
Trade plan for today:
Trading plan today is very simple. We will look for long trade above PDH (11020 levels), short trades below PDL (10920 levels) and no trades if prices move inside previous day’s range (10920 to 11020 levels). I will not be doing anything else (new adventures) apart from this. Now I expect bulls to continue up-move by opening above PDH, so a test and rejection of PDH anytime is a good level to buy. If you are in long trade today, keep trailing stoploss and target can be huge (we talked about a 200 points move in nifty- see above).
- Trade facilitation was poor by buyers, so if prices are accepted below PDL, we are no more bullish. Instead, we can look for short trade. .
- Banknifty has been weaker that nifty so now is the time for banknifty to rise from ashes, so watch for action in banknifty.
- If Banknifty is weak today also, it will hinder Nifty’s progress on upside.
- 11230 on upside is very important level, watch for the price action in that zone if it comes.
Please note that this is a personal view for learning , observational and education purpose and is not a trading recommendation. Trading futures carry a risk, so you should consult a financial expert before taking any risk. Also, Nifty in above statements Indicate Nifty future for current month and not Nifty index. I would be updating post-market analysis in the follow up post later.