BANKNIFTY [16th July 2020]

The index failed to breach 22000 in the first half and ended the day flat with a 400 point sell-off in the last hour. However, it is interesting to note that the index closed within the trend channel. Hourly and Daily Stochastics are still negatively biased and has some more room to bottom out. The week's expiry could close with a tight rangebound consolidation day, which is ideal for option writers. However, beyond certain levels, one can ride the momentum.

On gap up, the usual levels, 21650-21800 will be tested. In case 21800 is being held, one can go long for a target of 22040. If the index sustains above 22000, a short covering rally will take the index to 22500.

On gap down, the trend channel would've been broken and the opening should be below 21200. In case there is a pullback but the index fails to breach and sustain above 21250, the index might very well head for 20800 (38.2% fib retracement). Ideally the index should take support at 20800 and close the day above 21000. However, in case the panic selling snowballs, beyond 20800 there is no real support until 20100.

I will pass on speculating the expiry range for tomorrow.

*Note: The levels mentioned above should be used as approximation.