Pre-Market Analysis: Bank-nifty Future – 30th July 2020

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Observation from previous day:

On Wednesday, Bank-nifty opened inside previous day’s range and Broke PDH (previous day’s high) in open auction but bulls were not able to sustain that opening up move. Bank-nifty then, consolidated in the upper end of range and tested POC (point of control) late in the day and closed above POC (point of control) forming an Non-trend of day with sideways move. Also, after a long time, bank-nifty showed more strength than nifty and was able to sustain above PDH (previous day’s high) for a longer time as a mark of acceptance. The late fall could be on account of buyer’s exhaustion and we will get confirmation only if price starts trading above PDH (previous day’s high) again. Until then, it is better to stay out of Bank-nifty and wait for a clear picture.

What can be expected today:

Bank-nifty is expected to open inside range a a really boring thing that can happen is it moves in a further narrow range sideways for entire day. This can be possible as today is expiry but based on the range it formed yesterday, i am expecting a move out range beyond PDH (previous day’s high) or PDL (previous day’s low). Need less to say, price acceptance above PDH (previous day’s high) is bullish and price acceptance below PDL (previous day’s low) is bearish but I would also prefer a long trade in case price gets rejected at PDL (previous day’s low).

Trade plan for today:

No clarity in open auction but we can look for a long trade in BNF is prices break PDH ((previous day’s high). Another point to look for a long trade is at rejection of PDL (previous day’s low). If prices are accepted below PDL (previous day’s low), we will ignore any long trades in BNF (bank nifty future) but I will not look for a short trade today as I do not have conviction on shorts and it could turn out to be very volatile and difficult. .

Some cautions:

  1. Bank nifty was stronger than nifty yesterday, so bulls should take the prices above PDH (previous day’s high) today to give a confirmation that they are still in control.
  2. Today is expiry, so a sideways move is in best interest of option writers.
  3. Bank-nifty is close to breakout zone on upside, so sellers need to be cautious.
  4. If prices starts going down decisively below PDL (previous day’s low), do not look for long trade, don’t ever try to catch a falling knife.

Disclaimer:

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, Bank-nifty in above statements Indicate Bank-nifty future for current month and not Bank-nifty index.

2 comments

    1. Hi Vijay,
      There are lot of free resources on youtube on market profile from which you can learn but be very careful while selecting those as anyone can put anything on internet. If you can learn from books, then Jim Dalton’s book especially “Mind over Markets” is a no-brainer. That should be enough. There are some books by indian Authors also and some of them take trainings also, so if you need any recommendation, pls send me a mail to onerighttrade.com (Disclaimer is that i am not part of any training programs conducted by anyone)

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