Pre-Market Analysis: Banknifty Future – 28th Oct 2020

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Observation from previous day:

On Tuesday, Banknifty opened inside previous day’s range and sellers tried to take prices below PDL in the start but were met with strong responsive buying which took the prices above PDH (previous day’s high) forming a NVD (Normal variation day) on upside. Now , we are back to the upper end of the sideways zone again and we need to see a follow through on upside or else we can expect a sideways move again in case there is pending business in this area and smart money is not done with accumulation or distribution (whatever they are doing).

What can be expected now:

I have a bullish view on Banknifty if prices are accepted above PDH (previous day’s high). a poor high above PDH is another level to watch for and acceptance above PDH can give a good move to upside. In case prices are accepted below PDH (previous day’s high), we might see some more consolidation and it would be a good idea to avoid taking positions in sideways movement. Remember, all moves look good and easy to trade after the market has moved but just because market has moved does not mean it was tradeable.

Trade plan for today:

I will opt for a long trade only on break or acceptance above PDH (previous day’s high). Once prices breaks PDH, it should not come back inside range again, so we need to observe price activity carefully once it breaks PDH. I will not look for any short trade above PDH and I will not look for any trade if price shows acceptance inside previous day’s range.

Some cautions:

  1. No short trades in case prices trade below PDH (previous day’s high)
  2. In case, prices are acceptance inside previous day’s range, there is not much clarity and it is always tough to trade sideways market as the movements are zigzag. So, better to stay out or trade with less position size.

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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