Pre-Market Analysis: Banknifty Future – 20th Oct 2020

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Observation from previous day:

On Monday, Bank nifty opened above previous day’s range with a gap up and sellers did try to push Banknifty back in range at the start (you will know it only if you were watching yesterday’s price action live), But this responsive selling was so weak that they did not even managed to test PDH (previous day’s high). Taking advantage of sellers’ misery, Buyers pushed the prices higher above the sideways consolidation range, testing and moving above poor high and therefore indicating a breakout on daily charts also. The only thing to worry is that the trade facilitation was not good by buyers and there was a lot of TPO (time price opportunity – the letters in the charts above) overlap due to which I do not have much confidence in this breakout. Because of this poor trade facilitation, it becomes very important for buyers to give a follow through above PDH today otherwise there is a risk of this breakout turning into false breakout.

What can be expected now:

Bank nifty has move above the sideways range and we need to see a follow through on upside for buyers to be in control. A price rejection at PDH (previous day’s high) or price acceptance below POC (point of control) is not good indication for Buyers.

Trade plan for today:

I have no trade plans for today due to personal reasons but I would have looked for a long trade if price accepts above PDH(previous day’s high) but then one price moves above PDH, we need to trail tight as prices should not come back into range after that. Also, there is no point of looking for a short trade above PDH (previous day’s high) today, though we can look for a short trade only if prices fails to trade above PDH (24410) and starts trading below POC levels (24150).

Some cautions:

  1. I am expecting a good move upside in Banknifty if price gets accepted above PDH (previous day’s high), other wise it will be most likely a sideways move.
  2. There is not much clarity in Banknifty looking at the big up-down action in last 3-4 days in both Nifty and Banknifty, So I am preferring to stay out of Intraday trades for some days.


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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