Observation from previous day:
On Wednesday, Banknifty opened above PDH (Previous day’s high) with a big gap up and repaired all the poor highs (as it opened above swing high). Sellers took control from the start making an open-high (open=high) and pushing banknifty bank to range. As we indicated in yesterday’s post that trade facilitation by buyers is not good (https://onerighttrade.com/index.php/2020/07/22/pre-market-analysis-banknifty-future-22nd-july-2020/), Sellers took advantage of that but still there were unable to close below POC levels. On higher timeframe, we are still in uptrend and this is just a retracement as of now but we need to monitor BNF closely now for further developments.
What can be expected today:
I do not have much clarity on banknifty but now until prices go above PDH, we can expect sideways to down move (Note, yesterday poor highs got repaired and are replaced now with a selling tail which is stronger pattern). Below PDL, prices can drift to test poor lows but we saw yesterday that trade facilitation by sellers is also poor, so there is a fight and sideways is higher probability.
Trade plan for today:
I will not be looking for any directional trades today. Sellers are expected to keep prices below PDH and buyers are expected to buy all dips, so no trade is a good idea until we start trading above PDH. Only above PDH, we can look for a long trade, but considering today is expiry, that is less likely to happen.
- Today is expiry, so be careful of buying any options.
- We can continue to see a fight between buyers and sellers and no trade (long of short) will be smooth till we break out and have clarity.
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, Banknifty in above statements Indicate Banknifty future for current month and not Banknifty index.