Pre-Market Analysis: Banknifty Future – 22nd Sept 2020

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On Monday, Bank-nifty opened inside previous day’s range and moved sideways for first half and broke PDL in the second giving a big move to downside (This was expected from previous day analysis – see Pre-Market Analysis: Banknifty Future – 21st Sept 2020). Now, it has become clear that Banknifty has broken down from the previous sideways range and is moving down. Monday was a big trend down day, so it would not be a surprise if we halt for few days before moving down again or we might continue moving downwards. One thing I would like to point out here based on my discussion with one of the trader yesterday is that, Shorts in market look easy once everything is over, but in actual , it is tougher than a long trade. Most fierce rallies are seen in Bear markets only. Anyway, yesterday’s VWAP is a crucial level now and till we trade below VWAP, there is no point of being bullish, so I will have sideways to bearish view if we continue accepting below VWAP.

What can be expected now:

After a big move yesterday, there can be some kind of halt and sideways move but I will be bearish on market until we start accepting above VWAP levels. If you notice the last two days, Sellers are absorbing all the demand in the first half and then moving prices down in the second half, so we need to be aware of this pattern today also.

Trade plan for today:

I have no clarity at open auction but if we open below PDL , then a test of PDL and a failed attempt by buyers would be a good point for a short trade. If we open inside range, we need to see buyer’s exhaustion before taking any short trade.

Some cautions:

  1. There is no point going long in bank nifty if we do not accept above VWAP. this does not mean there cannot be a rally. Since, overall sentiments are bearish, smart money can take prices up to throw out weak sellers but I will be happy to miss any long trade, and also we need to be careful of short trades.
  2. As I said above, short trades are riskier than long trades , so entry in short becomes very important.


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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