BankNifty has certainly started recovering well, but given that we have just broken out of an important zone, trading BankNifty can get pretty tricky tomorrow. Here's a simple long setup that I think offers pretty good probability of success with good risk to reward ratio.
Rationale:
- Price has just broken through an important zone, but it hasn't been properly retested yet(which may never happen, but as a trader we should plan for that). So I'm expecting some retraction from the current level, before we start getting some good long opportunities.
- We have seen some good volume in last couple of sessions, and expect some profit booking if market opens with a gap-up. Though that seems less likely, as buyers seemed exhausted in the second half today, and I won't be surprised to see the market open with a gap-down(which is better for this setup).
- Indicators like RSI & Stochastic suggesting overbought range on 1H & smaller TFs, the market is not really trending yet according to ADX.
- If the market opens with a huge gap-up, then this trade is off. Otherwise, we wait for the mentioned price levels to hit and take positions accordingly, we must give market at least 3 hours for this trade to work, so don't take position if we there's not enough time(say after 12 PM).
Final Note:
- This just my personal opinion, not to be considered as a financial advice.
- Expect high volatility, so size your positions based on your risk appetite.
Rationale:
- Price has just broken through an important zone, but it hasn't been properly retested yet(which may never happen, but as a trader we should plan for that). So I'm expecting some retraction from the current level, before we start getting some good long opportunities.
- We have seen some good volume in last couple of sessions, and expect some profit booking if market opens with a gap-up. Though that seems less likely, as buyers seemed exhausted in the second half today, and I won't be surprised to see the market open with a gap-down(which is better for this setup).
- Indicators like RSI & Stochastic suggesting overbought range on 1H & smaller TFs, the market is not really trending yet according to ADX.
- If the market opens with a huge gap-up, then this trade is off. Otherwise, we wait for the mentioned price levels to hit and take positions accordingly, we must give market at least 3 hours for this trade to work, so don't take position if we there's not enough time(say after 12 PM).
Final Note:
- This just my personal opinion, not to be considered as a financial advice.
- Expect high volatility, so size your positions based on your risk appetite.
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