BankNifty Update for Jul-07

Banknifty opened Gap up 400+ points and then there was not much of trading opportunity as it was rangebound throughout the day. There is still a possibility of upmove towards 22500/22700, but the daily chart showing a lack of momentum.

It is interesting to observe that Banknifty did not break the top made on Jun-24 @ 22479 though Nifty-50 made a new top. So there is a divergence in Nifty and Banknifty. This is a sign of weakness unless Banknifty catches with Nifty.

Jul-07 is the Gann date (minor time cycle). It will be interesting to watch whether it breaks Jun-24 high and reverse or continue upmove.

The hourly chart shows consolidation after the gap up. Hence, the possibility of further upmove is strong.

FNO Data:

The future OI decreased by 8% with an increase in price. So normal analysis suggests Short covering. But it looks like long unwinding as we saw longs building last 2 days. So we need to be cautious at higher levels.

Trade Plan:

Above 22330 targets are 22450/22550/22700

Below 22120 targets are 21950/21800

I am cautiously Bullish.

Comments

VIX Analysis

The daily VIX chart shows the formation of Doji candles at the bottom and reversal. The daily RSI crossed the previous resistance level of 40. The MACD signal gave bullish crossover suggesting bullish move in VIX. So the daily chart shows the possibility of VIX moving towards 28 levels in the coming days. The weekly chart shows the formation of wedge and reversal from the bottom. VIX may move towards the upper wedge line @ 29-30. So VIX suggesting the bearish mood of the market and hence the high possibility of fall in Nifty-50 and Banknifty in the coming days/weeks. VIX Gann Box: The daily Gann Box shows a reversal from the mid-zone of time factor points. The next time factor date is Jul-21. So will VIX continue to move high till Jul-21 or it will reverse from angle point? Wait and watch. Using VIX to spot Intraday Reversal on Indices: VIX is a very useful indicator to spot reversal during day trade. If the price of an index moves up and @ resistance zone watch values of VIX. If VIX s...

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BankNifty Update For Jul-09,2020 - Weekly Expiry

Banknifty opened Gap up @ 22700 and then achieved all our bullish targets of 23900/23000. But the upmove was very choppy and looked like terminating pattern and was not easy to trade. So I did not take a trade on the upside. My observation was Banknifty good up (250-300 points) while Nifty was not at all moving up and was just 10-15 points up and VIX was increasing. That was a signal that there is a high probability of reversal. (I twitted this around 12.30 pm). Banknifty continued its upmove and VIX was not falling, so I was sure that reversal is on the card from the strong resistance zone of 23900-23000/50. In yesterday's post, I mentioned about daily RSI @ resistance. That was another reason I was expecting a high probability of fall after it moved higher levels to come to at least yesterday's close levels or below. I got down-trade from almost 23000 to 22700 (got out earlier as it was intraday and not much time left though I was expecting at least 22600. It gave a much lowe...

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