Nifty & Banknifty Daily analysis for 21st May 2019

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Good Evening Guys,

After getting good positive moment in last trading session, we saw a sharp decline in today’s session. Nifty & Banknifty closed in negative territory with 1% & 1.5% loss respectively. Most of the sectors closed in red. Auto, MEDIA and midcap 50 are the top loosers today. Based on charts.

Nifty daily Analysis

As we discussed in our last postlast post, that this upside movement is not that convincing. Now a days market is moving more on sentiments due to election result week. And same think we saw in todays session, most of the yesterday’s buying got disappeared. On charts we can see a strong bearish candle. As i already said in my previous post that this move either upside or downside both are event based move. We can’t create a short term strategy based on these moves. We’ll get clear picture only after results will out. Till than just place defensive strategies only. I prefer iron Condor or iron butterfly for this event, as both the strategies carries neutral delta and Vega with limited risk.

In this type of market, chances of loosing money is high. If you don’t know how to Deal with VIX or volatility, better stay away from this market untill this event is over. Spend your time to learn new things. Our educational partner Elearnmarkets is providing 33% OFF on all webinars. Spend something on your learnings insteed of taking unneccsarry risk. Click here for more details.

Based on options chain data, highest open interest stands at 12000 CE & 11500 PE followed by 12500 CE & 11000 PE. We can see that range is wide in this expiry week. Option pain has shift to 11700 from 11600. Around 4.5 lakh open interest build up in 12200 CE,12400 CE and 4 lakh open interest buildup in 12000 CE, which means we can still expect a strong resistance zone around 12000.


Banknifty daily analysis

After gave a good upside movement in last trading session, Banknifty face resistance at 50%-61.8% retracement level. Now 30150 will act as a immediate support level, close below will lead to 29550. On uper side 31159 is strong resistance zone. Close above will give a new buy signal for BANKNIFTY. As this is election results week, we can expect some high Volatility, which can give a wild move in either direction. So keep your risk management on higher side.

Based on options chain data, highest open interest stands at 32000 CE & 29000 PE followed by 31000 CE & 30000 PE. We saw some good open interest buildup in 32000 CE & 34000 CE. indicating a strong resistance zone around 32000. Option pain stands at 30100, giving expiry level at 30100. A shift in option pain will give further levels. Keep tracking.

Final words:

AS we know that market is highly volatile, so keep your open strategies with proper hedge. Capital protection is more important than making money. If you can manage to protect your capital, profit will come automatically. Do not take any trade based on fear or greed. Trade with proper risk management and keep your back up plan always ready.

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Nifty & Banknifty Daily analysis

DISCLAIMER: – we are not a SEBI research analyst. Views posted here 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 to interpreting specified analysis methods.  This information should only be used by investors and traders who are aware of the risk inherent in securities trading.

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Sachin Sival is the founder and CEO of Replete Equities, an options trading company that specializes in delta hedging. A self-taught trader, Sachin has a passion for volatility trading and stock trading. Sachin loves to hone his skills by reading up on new strategies and techniques as well as taking part in industry events. In addition to being a successful entrepreneur, Sachin also takes pleasure in photography - as a hobby.

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