Hello everyone present here…
I have some quarry to ask…
Most of the trades prefer to trade Nifty and Bank nifty f&o contracts… As we all know it is one of the most liquid instruments traded in India and represent the performance of all 50 companies in case of Nifty50 and 12 banks with huge Mcap in case of Banknifty…
Let say for nifty 50 …
If nifty 50 is heading towards a resistance level… then most of the traders will buy puts or short call… is just a speculation … But buying puts or shorting call does not gonna affect the nifty because it is a contract derived its value of nifty itself… Rather in case of stocks when it reaches a resistance there is a high probability that profit booking takes place (buyers become aggressive) or we short sell… So it will come down…
But nifty to come down from that resistance level it means many heavy weightage company is also falling… But it may happen that many companies are trading higher so it break the R level in nifty…
Then when we trade nifty or bank nifty f&o contacts in the concept of r and s level… As we are not buying or selling their shares as in case of stocks…
You replies can make wonders 
@ShubhS9 @siva @Karthik
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support or resistance levels are psychological built on interpretion that once price reaches certain points it will reverse… at the end of the day it is all probability, all levels have as much chance of failing as it has of succeeding…
so when you are buying or selling f&o at support or resistance you are just betting that what has happened in the past works out… so if in past price of index reversed from some level our belief is that same will happen again, it is of less importance which stocks make it happen what matters is it should happen else we book losses and move on…
if you try going deeper in this, it will only create more noise in your head… next thing you know is you are plotting charts of all stocks in Index to confirm whether the levels will work or not… you think that is productive?
No that will definitely not productive…
As you can see the nifty is bounced back from the 13400 level …which act as a support earlier and also a psychological level… And the candle formed is a bullish pin bar with huge lower prices rejection… And this buying is not because of buying in f&o contact… Rather in case of any stocks we can say that buying in equity cash takes place… So at that exact time some heavy buying takes place in some heavy weightage stocks… Is it only reason right??
the logic is fairly simple… prices of futures are driven by underlying nifty index, prices of nifty index are driven by stocks it consists of…
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