Bank Nifty Trade Setup for 4th October 2022

Oct 3, 2022

Bank Nifty is currently in a indecisive scenario with Inside candle being formed in the daily chart. A decisive close on the upside / downside is need to decide on a potential direction from here.

Predictions
- Charts : Indecisive.
- OI Data : 38500 is going to be a strong resistance & 38k can offer some support.
- FII Activity : Super Bearish with addition of fresh short positions in OI and even futures saw significant amount of selling.

Verdict :- Short term outlook seems to be clearly bearish based on FII activity and even from OI which has 38500 as a resistance. A break above that can trigger a bigger rally due to short covering; however by the looks of it even a gap up opening would end up as an opportunity for adding fresh short positions.

Oct 4, 2022

Note

38500 being broken in the first candle has lead to massive short covering and Long buildup. Significant number Put OI have been added at both 38500 & 39k so far. Picture is looking quite different from yesterday (Which was clearly bearish with resistances at the top.) Now chances of sideways consolidation is high and it might stabilize at these levels. That being said, I am still skeptical of what would happen to those FII positions - they normally don't take losses easily, so keep a close watch on price action as a Sell off might come in as well.