Bank Nifty & Nifty Trading Strategy for 20 June’13

Nifty as on 19 June’13– 5822.25 (+8.65)    Bank Nifty as on 19 June’13– 11852.65 (+31.70)

Bank Nifty Technical Chart as on 19 June'13 - Way2ProfitsIt happens many a times that chart speaks thousand words. Nifty and Bank Nifty moved in a consolidation during yesterday. But Bank Nifty draws attention. Please see attached chart of Bank Nifty, first of all bank nifty is consolidating near its 200 DEMA from last few days, and also if we draw a simple trend line from the high of Bank Nifty than still it is valid, which clearly indicates that, below this trend line, Bank Nifty will stay in negative zone, and turn traders attention, it has to give upside breakout. It looks so simple, isn’t it? But traders don’t take this seriously.

Nifty Trading Strategy

It’s not magic, its power of technical analysis. In the last article we had mentioned that in between 5870 and 5775, we don’t see any trading opportunity, and Nifty made a low of 5777.90 and finally closed with gains. Now all the markets are waiting for verdict from FOMC meetings, and it is very much possible to see Gap Up or Gap Down opening. So at such crucial juncture, trader should be clear with their trading strategy. Let’s figure out our trading strategy,

a)      If Nifty opens and sustains above 5870 level than it will be a first sign to turn positive. Here aggressive traders can go Long with one lot, but actual confirmation of Long position will come only above 5910 above this level add one more lot to your kitty.

b)      If Nifty moves above 5910, than resistance will come at 5970, at this juncture it is advisable to book one lot initiated near 5870, and hold balance lot with stop of 30-40 points.

c)       Another way round, If Nifty moves below 5775 than support comes at 5680 levels. I would recommend here to Long Puts of 5700 strike price and one lot of 5600 strike price. But consider one thing volatility will be high so trader has to pay high premiums at that point in time.

Bank Nifty Trading Strategy

We sense that Bank Nifty is still moving under risk, it is just an intraday volatility which is taking toll from traders. Below falling trendline, Bank Nifty will stay weak. If you are risk averse then it is better to excuse Bank Nifty for time being.

At Way2Profits, we always give you unbiased view. Please, don’t take our ideas as trading recommendations, it is just for educational purpose only, and we don’t accept any responsibility for the same.

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