Pre-Market Analysis: Bank-nifty Future – 28th Aug 2020

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Observation from previous day:

On Thursday, Bank nifty opened with a small gap above previous day’s range and immediately buyers took the prices up. After initial balance was formed, prices struggled for the entire day near the top of IB range (initial balance) and consolidated in the narrow range for rest of the day forming a NVD (normal variation day) to upside. Though this consolidation could be on account of expiry, the trade facilitation by the buyers was not good and this also looks like exhaustion for now until we start accepting prices above PDH (previous day’s high).

What can be expected now:

Bank-nifty was stronger than nifty. There is not much clarity now as we are moving higher with value area shifting upwards but with a poor trade facilitation which could mean exhaustion, but until we continue moving higher, there is no point of not trusting the trend.

Trade plan for today:

There is no clarity at open auction today. I am bullish above PDH (previous day’s high) but i will not be looking for any long trade at open auction. Instead, if prices get rejected above PDH (previous day’s high) and comes back in previous day’s range, I might be looking for a short trade after getting some confirmation. But Since, bank-nifty is stronger than nifty, I think it is a good idea to look for short trades in nifty rather than bank-nifty. But before all this, I have a basic rule, no shorting above PDH (previous day’s high).

Some cautions:

  1. Banknifty is more uncertain than Nifty.so better to avoid banknifty.

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.

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