I do not know why Banknifty (BNF) today fell. If we see that major beneficiaries of this corporate tax cut to 25% are banks, we also know that 5 major banks- HDFC Bank, ICICI, Axis, Kotak Mahindra bank & SBI account for more than 85% of BNF weightage all get a straight 14-16% earnings increment [a tax cut of around 10% translates to over 15% of earnings increase on an approximate basis] assuming these 5 banks are paying 35% tax. So roughly if you increase BNF by 15% over pre-tax-cut-announcement levels, which were 26900, BNF should be at around 31000! This means there is still headroom for BNF and that may push Nifty up. But when and at what levels is difficult to predict.
Option chain data is really inconclusive and suggest a wide range of 1500 points- from 29500 to 31000, so let's forget that.
On charts, just like that on Nifty, we see an ascending triangle pattern developing and I think near expiry due to compulsory squaring off of short positions (which I have explained in great detail on my post on Nifty), it may result in breakout on thursday.
As for trading levels, Monday's high and low can be taken as limits but I would rather take a long trade at lower limit because BNF can start running away anytime due to reasons mentioned above.
All the best. Happy trading.
Option chain data is really inconclusive and suggest a wide range of 1500 points- from 29500 to 31000, so let's forget that.
On charts, just like that on Nifty, we see an ascending triangle pattern developing and I think near expiry due to compulsory squaring off of short positions (which I have explained in great detail on my post on Nifty), it may result in breakout on thursday.
As for trading levels, Monday's high and low can be taken as limits but I would rather take a long trade at lower limit because BNF can start running away anytime due to reasons mentioned above.
All the best. Happy trading.