Banknifty Analysis for tomorrow 29 Apr 24

Apr 27

As we discussed the live market Banknifty analysis, after that, it showed a huge fall.
If we look at the chart now:
The market is trading at the 200 EMA, which is likely a very good support point. Also, it gave a nice pullback with good volume in the last 15 min. Also, the market is trading at the 0.23 fib level, which is not likely to provide support after such a sharp fall. I expect the market to give the 0.38 fib retracement.
ALL IMPORTANT LEVELS HAVE BEEN MARKED ON THE CHART.
If we look at the OI data:
PCR = 0.82, which has fallen from 0.98, which shows bears are increasing their positions in the market continuously. On the last trading day, there was a huge call writing on upper levels at 48300, 48400, and 48500. on the lower side, 48200 and 48000 are the only PE writing left. If 48000 breaks to the downside, there is not much PE writing on the lower side.

If we look at the FII & DII data, FII and Pro are strong, bearish clients while clients are bullish, which shows that the market is going to open a gap-down.

The market is at a crucial level right now. There are two cases:
Case 1: If it takes support at 200 EMA, it might come back strong and touch 48600 again.
Case 2: If it breaks to the downside, it's going to test the 0.5 fib level at 47800.

Reasons:

1. price < EMA(13) shows the market is in a bearish phase. And bears are strong. While the price is taking support at 200, EMA might force the market to take support at this point.
   
2. RSI < 50 shows strong bears' power. Bulls are weak at this point. (Bearish)
   
3. PCR = 0.82, which has been falling rapidly from 0.98. shows bears are actively increasing their position size. (Bearish)
   
4. price < VWAP shows a bearish market structure. (Bearish)
   

Verdict: Mild Bearish

Plan of action:
Case 1: Sell 48000 PE (Hedge with 15/- PE premium)
Case 2: Sell 48100 CE (Hedge with 15/- CE premium)