Bank Nifty - Next Move

msk_analysis Updated   
BNF is in a zone that is really hard to day trade. Tomorrow is Wednesday so premium decay would be a factor to consider if you are playing with option buying

There can be two possibilities

  • BNF makes a trending move downside towards 50 DMA. DMA are like magnetic lines that attract price towards it when they are near. Usually, it is also seen that patterns repeat for a given script. Last time when 20 DMA was broken and the price was nearing 50 DMA it formed an inside bar. Today also it formed an inside bar. so possibility is high it may break 50 DMA.
    Possible ways to trade - If trading in future sell on rise and 35250(Future price) as SL. The target can be 50 DMA . If trading in options - selling 35100 CE with SL as 35250 (future price). If buying options risky one - you may want to go for 34500 PE as 50 DMA is 34230, so if the hypothesis proves right this OTM option will become ITM and may fetch you max returns

  • Another possibility - based on the below factors
    FIIs has bought heavily in the cash market.DII matched with selling. Fed meeting would be concluded after Indian trading hours. So it may happen that BNF remains range-bound. In that scenario, today's high and yesterday low may be taken as a range.

    Possible ways to trade- Selling strangle at BNF open price may be an option and keeping 25% as SL.

Happy Trading
Trade active:
Looks like time to test 50 DMA
An interesting observation - Usually VIX goes up when there is a fall in price, uncertainty or before any big events

this time if you would see, India VIX is going down, what would this divergence lead to ....
BNF testing day before yesterday's low. Let's see if it takes out 50 DMA or not today.

There is good OI build-up at 34500 PE strike price .. so its gonna be interesting
Trade closed: target reached:
What a day and what a move BNF - finally touched 50 DMA and allowed me to book profits :)

I hope you guys also would have made some money out of this


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