Pre-Market Analysis: Bank-nifty Future – 29th July 2020

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Observation from previous day:

On Tuesday, Banknifty opened inside previous day’s range and Broke PDL (previous day’s low) to test virgin POC (point of control) below PDL (previous day’s low) and as we expected (, buyers pitched in below PDL and took the prices back into range to closed above IB high forming NVD (Normal variation day) upside.There was this trade idea also given for a long trade ig prices come back inside range at rejection of PDL (previous day’s low). Anyway, After some days of weakness, we saw a little strength in banknifty but relatively, it is still weaker than nifty. So, if bank-nifty starts trading above PDH (previous day’s high), it needs to catch up with nifty. SO, PDH (previous day’s high) is very critical level in bank-nifty.

What can be expected today:

Bank-nifty nifty can remain sideways if it opens and trades inside yesterday’s range. but once it breaks and accepts above PDH (previous day’s high), we can see strength in bank-nifty, so it is advisable to look for long trades only above PDH (previous day’s high) and rest can be ignored. Only if bank-nifty breaks PDL (previous day’s low), we can look for a short trade opportunity but until that happens, any short trade is not advisable.

So, the expectation is that bank-nifty will open near PDL (previous day’s low) and continue the up-move . The levels to look out for on upside is 22620 (very important- weak high) and 23000.

Trade plan for today:

Open auction in bank-nifty can be volatile, but if prices are accepted above PDH (previous day’s high) in first 15 minutes, then we can look for a long trade. Do not look for a trade if prices remain sideways and look for a short trade only once they break PDL (previous day’s low).

Some cautions:

  1. Bank-nifty needs to show strength now and that is very important. Till now, sellers seem to be focused on bank-nifty and if they start covering up, then we can see a good rally in bank-nifty.
  2. Watch out for Nifty and 11420 levels, if that is taken out, it would mean we are in uptrend and Bank-nifty will sooner or later start supporting nifty.
  3. If sellers manage to take prices below PDL (previous day’s low), then ignore the long view both in nifty and Bank-nifty and the best thing would be not to be in trade.


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.

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