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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 lower level of 22500). It reversed from the exact Gann Number of 22500. I took hedged positional short in Banknifty future.

The daily chart shows that it reversed exactly from the upper line of the wedge. The daily candle is very bearish one and hence further down move is quite likely with a probability of today's high as a top for a few weeks.

Today's RSI closed just below yesterday's RSI, signaling reversal as it is turned from resistance.
The weekly chart also shows Banknifty reversal from the resistance zone. Also, this is the 7th week from the low of May-18 week, signaling a strong possibility of reversal as 7th weeks are important Gann reversal time for a trend.

Gann Box:

The weekly Gann Box shows Banknifty reversal from the angle zone. This angle also provided strong resistance to the previous high made on Apr-30. Reinforcing a strong probability of top made today will not be broken for a few weeks.

Gann Angles:

Banknifty reversed from Monthly & Weekly Gann Angle.

VIX:

The daily Gann Box shows we just crossed time factor (3/4th of Box) and we saw trend change at every previous time factor zone. 
The daily VIX chart shows RSI @ support/oversold levels and the formation of Doji (yesterday). So a high probability of upmove in VIX. Similarly weekly RSI also @ support levels and this week's closure would confirm whether VIX will move up next week.

FNO Data:

Future OI increased by 7% and the spot to future premium is 26 points from yesterday's discount of 24, a 50 point up. Signaling bullishness (As usual it is confusing from the last few days).

Trade Plan:

Above 22700 targets are 22800/22900
Below 22500 targets are 22350/22150 Break of 22000 may lead to 21800.

I have strong Bearish bias. Tomorrow is weekly expiry hence we may see a rangebound move.
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