Lets have a quick check on top down analysis. On the Monthly charts – Trend is up and one timeframing for the last 5 trading months. Weekly timeframe – trend is up and very less rotations seen. However on the daily charts bank nifty futures is in short term balancing mode and looks structurally weak due to the nature of consecutive overlapping consolidation phases as shown below. Fridays session also ended below 4 day low.
Bank Nifty Futures Daily Charts
Fridays Sessions shows the domination of weak Day timeframe buyers dominating till 2.15p.m followed by active stop hunting with late spike where the sellers started dominating and also the day ended with poor high. Hence, spike rules apply on monday’s trading session.
Bank Nifty Profile Charts
Key Reference Levels
1)Double Mechanical Reference at 21725
2)Poor High at 21620
3)Prominent POC at 21577, 21230
4)Spike Base at 21520
Bank Nifty Futures Profile Charts – Compressed
Spike Trading Rules Apply :
i) Opening Below the Spike Low 21410 indicates a high confidence downtrending move.
ii)Opening within the spike base and Spike Low indicates sellers are less confident possible rotational or mean reverting oppurtunities towards the prominent POC. This scenario is less likely due to prevailing uncertainty Syria Missile Attack Tensions.
iii)Opening above the Spike base indicates high confidence up-trending move and possibly this could bring more higher activity towards new high in Bank Nifty. It also indicates that those who shorted below the value area on friday’s session is more of emotional traders who get short in the hole.
