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.
Bank nifty future faced major resistance around area of 18900-19000 (marked in blue) , It tried to break out of the range once on Wednesday trading session but again retraced back facing resistance at the trend line and closed negative at 18769.4 after making the intraday low of 18650.
Bank nifty future opened the day at 19701.55 and made the intraday low at 19512 before making the close after a strong bounce from lows in later half of the trading session at 19907.80. Markets closed on a positive note for the day but negative for the week.
Banknifty future from chart above looks like making a head and shoulder formation which is in its last leg of forming the right shoulder (which it should, to become a valid pattern). As per the chart above 19450 is tough line of resistance for bulls only once this level is sustained close basis the next up leg shall begin, till that the bank nifty is sell on rally and around 19000 there is a strong support from where it becomes a buy towards this resistance again.
It should be noted that open interest built up in 8000CE strike price crossed the 1 crore mark. Active call writing seen in 7800CE and 8000CE. Options writes are betting that nifty will close below 7800 for the current option series.
And the traders whomever traded one sided fashion could have busted in this volatile market which fizzle out the weaker hands. Market once again given a sign that the market is much matured than what you think.
Nifty on the hourly charts turned to positional buy mode yesterday with a whooping 2.98% and currently the support zone comes around 6684. And Banknifty which is currently outperforming nifty grabbed a intraday gain of 5.46% still maintaining the positional buy mode since 24th April with support coming around 13159. Reverse your position if the support breaks on the hourly charts.
Nifty on the hourly charts is in sell mode since 29th April 2014 and currently the resistance zone comes around 6766. However on contrary Banknifty still maintaining the positional buy mode since 24th April with support coming around 12794. Reverse your position if the support/resistance breaks on the hourly charts.
Supertrend Intraday Trading strategy will start trade the Supertrend only between 9:15a.m and 3:00:p.m and close any open position by 3:25p.m. The following code defines the time based rules.
Nifty hourly charts is in positional sell mode since 28th April and currently the resistance zone come near 6845. However Banknifty on the hourly charts still manage the positional buy mode and currently the support zone comes near 12790 and trades very close to the support zone. Reverse your trading positions if the support/resistance zone breaks on the hourly charts.
Nifty and Banknifty is in positional buy mode since 22nd April and currently the support zone comes around 6736 and 12820 respectively. Reverse your position to positional shorts if the support zone breaks on the hourly charts.
On 6th March India VIX volatility index achieves the all time low of 12.5 since then within a short span of time scales to above 30 due to the upcoming election results which creates too much of expectation among the option traders. India VIX had risen more than 100% since 6th March 2014. And the election results are likely to be announced on 16th March till then markets are expected to be in sideways mode.