Nifty & Banknifty daily analysis for 20th May 2019

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Good evening guys. Hope you all are doing good in your trading.

Market today:

After getting good number for NDA in exit polls, Both the index open gap up. Gave a good upside movement with huge short covering. Finally Nifty and Banknifty closed with 3.7% & 4.5% respectively. Nifty PSU bank, REALITY and INFRA are the top performer sectors for today. India VIX closed at 23.67 down by 15.7%. Now look at the Nifty chart first.

Nifty daily Analysis

As we discussed in our weekly analysis postweekly analysis post, Nifty took support at 50-61.8% retracement level. I’m tracking and find that Nifty always respect these levels for reversal. Well, now a days market is moving based on sentiment more insteed of trend and other parameters. Now trading near to it’s all time high, a breakout will lead to further levels. Now 12000 will act as a strong resistance level. On downside, 11550 will act a strong support zone for Short term.

Keep one thing in mind, as it’s election results week and market is highly volatile, we have not convinced yet with this upward movement. So let the final result come on 23rd,then only we should act on any perticular movement.


Today FIIs bought huge in Cash and FNO and DIIs were the net seller today.

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 stands at 11600. A shift in option pain will give us further expiry level.

Now let’s look at Banknifty chart:

Banknifty daily analysis

After took support from it’s demand zone Banknifty gave a good upside movement and closed at its all time high today. We saw some good buying in most of the banking stocks. Bank of baroda, INDUSINDBK and SBIN are the top gainners for today. Now 30645-31145 is the range, we need to keep on Radar. Breakout from 31145 will lead to 31856 & 32761 in short term. But as we are in election results week, volatility must be very high. 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 & 27500 PE. We saw some good open interest buildup at 32000 CE, 30000 PE & 29000 PE, indicating a wild range, so keep your position with proper hedge. We can get a good movement in either direction. Option pain stands at 30000, giving expiry level at 30000. A shift in option pain will give further levels.

What should be our strategy for coming sessions? 

As we all know that, Election Result and expiry both are on 23rd,so volatility will be very high in market. Market is going up but other macro factors such as low consumption Growth, result are not that good, crude also creating pressure etc, are not that supporting, so cautious buttom is still on. We’ll get clear market direction only after election results will declare. So any limited risk risk strategy should be our priority. Keep your delta and Vega neutral. Long Vega will also create some problems beacuse IV will come down very fast once uncertainty is over.

I wisk you a safe and profitable trading.

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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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