Trade Set up 05 Sep 2018

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1. SET UP to TRADE BANK NIFTY

  • Trend: (⇓ - downtrend)
    • " Bank Nifty is in the Mid phase of bearish Trend. So, Supply is Still in control of market today. Seller will have their Mild dominance over demand. "
  • Market set up : (- neutral to trend)
    • Today Bank Nifty Force set up is "OK" for Selling. So, Today is "Just OK" to Sell. You should look for Selling opportunity. But it may not have great momentum.
  • F&O trader position: (⇓- Basis is down )
    • The difference between bank nifty's future and spot (Basis) is now 184 points. The basis has fallen from last day about -10 points.
  • Bottom Line :
    • The Trend is down.>>ok set up to SELL>>Basis fall.

2. sentiments

  • Global markets:
    • Asian market is down + DOW future is flat!
  • what is news on TV
    • Global market is not cheerful as of now!
  • Positive newsflow:
    • exporter are willing to sell dollar & May be today exhaustion in selling in rupee and bank nifty! & Crude is down!
  • Negative newsflow:
    • other markets are in nagative is only nagative for day!
  • Bottom Line:
    • Sentments is mild positive. Sentiments are not supportive to on going trend.

3. Game theory ( tug of war between buyer & seller)

  • From where New Buying comes?
    • A.Since sentiments are Mild Positive, the Outside trader will come and buy.
  • From where new selling come:
    • A. Outside trader may not short sell today. B. Trader's with Long Position- less chance for Long unwind today.
  • Will buyers buys on dips?:
    • Today, Only short covering can be heavy, if it comes!
  • Will Seller sell on rise?
    • On rise-Since trend is Down, There will be a higher number of sellers at higher end which propels the market to go down on the intraday rise. Moreover, on Rise, a buyer who wanted to buy has already bought. So Selling on the rise is a dominant strategy as more seller & lack of buyer on rising of downtrend market

4. what I am going to do today (In bank nifty)

  • Set up:
    • Today Bank Nifty Force set up is "Supportive" for Selling. So, Today is "Good set up" to Sell. You should look for Selling opportunity.
  • Sentiments:
    • sentments is mild positive
  • EDGE:
    • My today trading edge points clubbing setup & sentiments is 0 .Today, I don't have any edge ( NO EDGE), so I will NOT TRADE AT ALL..
  • ENTRY on edge:
    • Since I dont have any edge on short side, I will not short sell. But if rupee recovers, I will also buy for small gain
  • EXIT:
    • I will book 50-60 point profit , if rupee recover and I get profit!
 

Abhikumar Patel
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