Banknifty opened mild Gap up but could not sustain and came down sharply to 21000 levels (20983). But again gave sharp upmove towards our first resistance 21450. So we got a good trade from 21100 to 21450. It faced strong resistance in the 21450-21550 zone.
Even though it made good upmove VIX was not showing any sign of cooling down and actually moved up. So it was a clear signal that Banknifty may not cross the resistance zone and may reverse.
Banknifty gave sharp down move making top @ 21568. It was good trade set up below 21400 giving targets 21100 and below 21100, 20850 as mentioned in yesterday's post.
The daily chart shows that RSI made the "M" pattern (I discussed this possibility in yesterday's post) and gave us good downside trade. Daily chart shows, Banknifty facing strong resistance in 21500-600 zone and unable to hold those levels after crossing it.
The hourly chart shows Banknifty crossed moving averages and MA's given bearish crossover. This is 30EMA-40MA crossover that works well for the Banknifty hourly time frame.
Also, MACD gave bearish crossover, suggesting further down move in Banknifty. If Banknifty breaks the support zone of 20400-20300, then we may see a sharp fall towards 19700 (Minor support @ 20100).
If 20400-20300 support is hold then we may see another upmove as shown by lines on the chart.
F & O Data:
The discount in Banknifty spot to future increased from 26 to 47 and the increase in OI is 9%. This indicates Short Build up in Banknifty.
Trade Plan:
Below 20300 Target 20100/19700/19500
If after down move finds support in 20400-20300, then above 20400 targets 20800/21100
Above 21100 targets 21400/21500
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