Pre-Market Analysis: Banknifty Future – 29th Oct 2020

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Observation from previous day:

On Tuesday, Banknifty opened below previous day’s range but that was a freak low and trading started almost 1000 points above that near to PDH (previous day’s high). Prices got rejected from exactly PDH (previous day’s high) and continued one way down for the entire day but because of freak low, it was a Normal day (if we ignore freak low, then it would be a down trend day in Banknifty) but inside previous day’s range. Banknifty is still moving sideways inside the bigger sideways zone but prices coming back near PDL means there is a pending business near or below that area, so we might see prices moving further down.

What can be expected now:

I have a bearish view on Banknifty if prices trade below PDL (previous day’s low) otherwise I have a sideways view on Banknifty today. Having said this, prices trading for a longer time near PDL is also not good for buyers and we might see a down move later in the day if that happens. but one thing which is very clear is that I will not be looking for long trades below PDL (previous day’s low).

Trade plan for today:

I have no clarity on banknifty in open auction and it is expected to be volatile. I will then wait for IB range completion and then probably look for a trade based on levels where prices are getting accepted. Today is expiry, so Banknifty can move sideways for most part of the day anf only move directionally later in the day (this has been happening in Banknifty on expiry days from few days).

Some cautions:

  1. More action now a days is in Nifty than Banknifty. So, watch out what Nifty is doing.
  2. Today is expiry and I am expecting this expiry to be volatile because of overnight sentiments, so either we can stay out of Banknifty 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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