Classic Example of Using Gann Nos for Option Trading-Part 2

Today I am posting where we need to avoid taking trade when Gann No is broken but possibility of further move is low. In today's trade around 11.45 am - 12.00 pm, Bank Nifty was trying to broke Gann level of 20933/20940 levels and was able to reach 20958. It was time when I tempted to buy CE, but certain observations on charts stopped me from going ahead and it proved right in next few minutes!

Observe that prices on all 5-min candles showing reversal from top i.e. all candles have Doji pattern that suggest possibility of reversal if formed at top of trend. Though few candles closed above 20940, I had doubt in mind due to Doji pattern as well as Option prices not moving above its respective degree level. Take a look at following option price charts for 21000CE and 21100CE to understand I am trying to pointing out.

In case of 21000CE it was candle pattern similar to what Bank Nifty had, Doji candlestick though price was crossing desired level of 57(45 degree movement option). In case of 21100CE prices did not reach 34 level(90 degree movement option).

Hence, it was best to avoid trade though Bank Nifty breached Gann Level and Option Price also broke desired Gann level.

Comments

Bank Nifty for Week Starting Jan 16, 2017

Last week Bank Nifty made big up move of 650 points. High made is 18966. It looks like it is ready for further up move. On hourly chart Middle BB line(RED color) is providing support and Index may again move up towards upper line of Blue Channel. The Best trading strategy is now to go Long when Index is bouncing from Middle BB line and Exit when it is near upper line of Blue Channel. Hourly RSI shows Resistance at 85 level and Support at 59 level. So Blue channel along with RSI levels are good indicators for trade. It is not good idea to go short as Up Momentum is strong. If Index breaks Middle BB line then only short positions should be taken. If Bank Nifty breaks 18850/18800 then we may see it reach quickly to 18650/18600. Also it may break RSI support level of 59 for major correction. We may see Index moving along Upper BB line (Blue color) on Daily chart. Index may face resistance at 19150/19200 level. If it crosses 19200 it can reach to 19500/197000. Daily RSI is

Bank Nifty EOD Update Feb 15

Bank Nifty today move down sharply after opening Gap up and making Top of 20368 just near Gann No 20364 and reversed sharply making Low at 20115 and closed at 20163. It seems wave B is completed at 20368 and wave C is started (confirmation only when Bank Nifty crosses 20000). We may see bank Nifty moving sharply to 19700/19500. Daily chart shows RSI crossing 70 level from top that shows possibility of down move. Also Bank Nifty broke lower channel lines (Blue as well as Red). So Bank Nifty may fall sharply in wave C.

BanknIfty Update for Jul-15, 2020

Banknifty opened Gap Down and continuously moved down. In the last 2 days, it almost falls more than 1200 points. We are able to capture this move from almost the top of 23000. The daily chart shows Banknifty took support at 30-EMA levels. MACD signal gave a bearish crossover signaling possibility of further fall in the coming days. RSI @ significant levels of 50. Break of 20900 could lead to a sharp fall towards 19700/19500. On the hourly chart, the MACD signal gave bearish crossover yesterday, and we saw a good fall in Banknifty. Gann Box: Weekly Gann Box shows Banknifty exactly changed the trend from the time factor zone. Also, the weekly opening was near the angle and it reversed after hitting angle and gave a good fall. It signaling a bearish trend for the coming weeks. On the daily Gann Box chart, we can see today Banknifty opened near angle, hit angle, and reversed sharply giving good down move. FNO Data: The future OI decreased by 7% signaling short covering with fall. The spot

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