If you are looking for some guidance on how to trade the Nifty and Bank Nifty indices in the Indian stock market, you have come to the right place.
In this blog post, I will share with you my analysis and predictions for the Nifty and Bank Nifty based on technical indicators, market sentiment, and OI data.
I will also suggest some options strategies that you can use to profit from the expected market movements. In particular, I will focus on the Bank Nifty prediction for tomorrow, as it is one of the most volatile and liquid indices in the market.
So before wasting your time, let's look at the intraday trend analysis:
Intraday Trend Analysis Based on the chart
After a range-bound activity on August 1, 2023, the Market opened a gap-down today. We can see an aggressive short buildup from the higher side.
Despite aggressive short buildup, Nifty and BankNifty, both are trading in a range. A need a sustainable breakout for further levels.
The overall trend looks bearish where 216 stocks are advanced, 283 are declining and 1 is unchanged in the Nifty500 index. So overall trend looks bearish today with a bullish short-term sentiment.
In Nifty Bank Indice, most of the stocks are down by more than 0.50% indicating a completely bearish sentiment in the BankNifty.
India VIX is up by 4% indicating that volatility is high today.
- As I have shared in my last Market Trend Analysis post, Nifty is trading in the range of 19400 - 19900. This range is important for further levels. A sustainable breakout or breakdown from this range will trigger a long or short signal.
- BankNifty also trading in the same range (44800 - 46200) that I have shared in the last post. We can expect further upside only after a successful breakout from the 46200 level. On the downside, a breakdown from 44800 will trigger a short trade for the target of 43200.
Based on short-term trends we can create some neutral strategies till we are not getting any fresh breakout or breakdown. Increasing IV also gives a good opportunity to deploy some credit spreads with neutral views like Batman Option Strategy, Iron Condor or Iron Butterfly.
I have created a neutral strategy in DLF for the August expiry. Click below link to check it.
Intraday trend analysis based on OI data
- For Nifty: Support has been shifted to 19500 from 19600. Having a PCR (put call ratio) of 5.08 and resistance has shifted to 19700 from 19900 with a PCR at 0.42. Max pain is at 19600.
- For BankNifty: Support has been shifted to 45000 from 45300 with PCR at 4.94 and resistance has been shifted to 45600 from 45800 having a PCR of 0.36. Max pain is at 45400.
- Current weekly Expiry Range:
- For Nifty = 19500 – 19700.
- For BankNifty = 45000 – 45600 ( based on current oi data. Keep following change in OI for further levels)
The intraday trend is “Highly Bearish” in bith Nifty and BankNifty. (based on our trend-following sheet and setup)
Trading Plan for Today
Because of the trend, we can create bearish strategies in Nifty & BankNifty:
- In Nifty, We can short 19750 CE while keeping 19700 as stoploss.
- In Banknifty, We can short 45800 while keeping 45600 as stoploss.
One thing you should keep in mind is that the above trades are based on the current data and need some adjustments if data changes. So proper knowledge and understanding are required before taking entry into any position.
If you don't know how to create and manage these option strategies, Option Strategies: A Mentorship Program would be the best online course for option trading.
I have also shared my Intraday strategies and trading setup in a small course. You can click on the below link to get access to the course.
DISCLAIMER: We are not SEBI research analysts. Views and trading strategies are posted in this post only for educational purposes. There is no liability whatsoever for any loss arising from the use of this product or its contents. This product is not a recommendation to buy or sell, but rather a guideline for interpreting specified analysis methods. This information should only be used by investors and traders aware of the risk inherent in securities trading.