Let me cut short the top down analysis quicker in Bank Nifty Future Charts. We are trending higher on the monthly timeframe, weekly timeframe and daily timeframe. Typically every timeframe is indicating long. However banknifty looks structurally weak due to the nature of consecutive overlapping consolidation phases. This makes one to doubt about the current elongation of the trend above which occurs recently above the consolidation phases.
Though traders are coming and buying every breaks in banknifty, Consecutive consolidation phases followed by a breakout indicates that markets are getting tired of the trend and trend reversals are quite common in this phase. Trading longs are absolutely fine in this phase but better to reduce the position size in longs due to the risk in trend reversal involved.
Bank Nifty Market Profile
Here are the major reference zones from the profile charts
i)Breakout Failure on Friday Trading Sessions at 21583
ii)Prominent POC at 21536
iii)Top Balance of the Multi Distribution Day at 21386
iv)Gap Top Reference at 21313
v)Prominent POC at 21266
vi) Weekly high at 21654
1)Now considering the reversal odds in banknifty and if the late sellers are serious about the current business, then a gap down followed by a strong acceptance below 21536 indicates a high confidence trade setup and could be the starting point for trend reversal or a new balancing phase. Fading the Gap reference at 21313 is the possible trade setup based on the price acceptance below prominent POC
2)In case if the price open within prev days high-low range especially centered around the POC 21583. Probabilities are higher that we could see more compressed trading range on monday’s trading as well.
3)Price trading above 21536 and strong acceptance above 21536 will bring some more higher trading activity in the index futures