BankNifty Futures sentiment turned negative post the RBI Policy announcement. Profile distribution completely traded down below the Thusday’s Prominent POC which could act like a temporary short-term resistance. However, Thursday’s session also ended with the failed auction at the day high i.e. around 45142 levels.
The overall context is buy on dips if you are a mean reversion trader. For breakout traders price crossing above Thursday’s session holds the key to trade towards failed auction. Usually, a trade towards Failed Auction in Indices like nifty,banknifty comes with a target probability of 60-65%.
If you are a seller in this market then you have to be careful about your trading approach as the price failing to accept below 44400 is a sure sign of buyers gaining strength.
Traders who are looking for a low-risk trading strategy can adapt a bull put spread with breakeven at 44269 in the spot by selling weekly options contract 44500PE (ITM PE) and buying cheaper OTM Put option 43900PE