Trading Set Up for Banknifty on 16/04/2020

1. SET UP to Trade Nifty Bank.

  • Trend: (⇓-Downtrend)
  • Bank Nifty is in the 2nd phase of the bearish Trend. So, Supply is Still in control of the market today. Seller will have their Mild dominance over demand.

  • Market set up :(⇔- Neutral to trend)
  • Today Bank nifty Force set up is Supportive for Selling. So Today is Good set up to Sell. Today, you should look to sell.
  • Bottom Line :
  • The Trend is down.>> Good set up to Sell.

    2. Sentiments

    • Global markets:
    • Dow Jones future is Negative & Hang Seng is Negative.
    • What is on News/TV
    • We already fall enough. If BN stablise at low, then second half relly.
    • Positive News-flow::
    • Falling crude is good for india. Some packe may annouce. Reloance got overweight rating.
    • Negative News-flow::
    • MACRO data is disappointing in USA. Wipro number is not good.
    • Bottom Line:
    • Sentiments is Mild Negative. Sentiments is also supportive to Downtrend.

    3. Game Theory ( Tug of war between Buyer & Seller)

    • From where New Buying comes?
    • A. Since Sentiments are mild Negative, the Outside Trader will Buy on DIPS only.
    • From where new selling come?
    • A. Since Sentiments are mild Negative, Mild new short selling expected from outside Traders. B. Trader's with Long Position- "Less" chance for Long unwind today.
    • 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 from the intraday rise. Moreover, on Rising, 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. Today, you should look to sell.
    • Sentiments:
    • Sentiments is Mild Negative.
    • Trading Edge:
    • My Today Trading edge points clubbing Setup & Sentiments is -70 Point. Today, I 'don't have Any Edge', So I will ' Not Trade Today'.
    • Entry on Edge:
    • Sell- When BN is Between 19017-19179
    • Exit on Fair price:
    • Fair Price for Today's Trade is at least 18703 - 18568
    • Bottom Line for Day :
    • Trade in Direction of trend, But book Profit Near fair Price
      It's Significant intellectual property & New way to Analyse the Market which use Unconventional Instruments Like Behaviour Finance & Game Theory for getting clear & Unbies idea for Active Derivative Traders.

    Abhikumar Patel

    So you’re telling us to buy puts on NIFTY, right?

    yes, You could.