Pre-Market Analysis: Bank-Nifty Future – 31st Aug 2020

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Observation from previous day:

On Friday, Bank nifty opened inside previous day’s range, tested the POC (point of control) and then broke PDH (previous day’s high) to upside not to come back again. Sellers were very weak in Bank-nifty or Buyers were very strong in bank-nifty and it gave a 1000+ points move in a single day forming a trend day on upside with a clear one-time framing, so even trade facilitation in Bank-nifty was good by buyers unlike Nifty (read nifty’s pre-market analysis for today) . Now, with this move, bank-nifty has also broken on upside on daily time-frame and one main rule of upside is a quick follow through, so let us see if that happens today.

What can be expected now:

Bank-nifty is stronger than nifty and in control of buyers, so there should a good trade facilitation by buyers today also with a follow through above PDH (previous day’s high). we need to be cautious only if bank-nifty is accepting inside previous day’s range but until it trades above PDH (previous day’s high), there is no point in looking for any short trade.

Trade plan for today:

I am expecting an up-move in bank-nifty today also. So, I will be looking out for a long trade at break of PDH (previous day’s high) or test of PDH (previous day’s high) and then will monitor trade facilitation by buyers to evaluate whether the breakout is sustaining or not. No point is looking for short trade at start or till prices are trading above PDH (previous day’s high). I do not mean sellers cannot come, any one with big money can always take prices down as per their wish but only thing is odds are not in favour of sellers right now.

Some cautions:

  1. No shorting above PDH (previous day’s high), In fact, I will avoid shorting bank-nifty today.
  2. Long trade in bank-nifty can be more rewarding than nifty. So, a strange time when i am focusing more on bank-nifty than nifty.

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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