Thursday, 18 November 2021

Day4: Banknifty trading update & plan for expiry week

Will Banknifty Crash Next Week?

The market has Volatility, Uncertainty, Confusion, and Ambiguity. This is the most difficult to trade and invest in the market. The banknifty might consolidate, breaks down, or might reach a  new high.

The market structure is bullish on the weekly and monthly time frame. In a daily time frame, the trading strategy should be to sell near resistance and buy near the support level. . Once Nifty 500 breaks the 14000 level, a deep correction and panic selling can be witnessed.

Please scroll down to update how I achieved more than 2% return on a margin within 2 days.

Broader market structure - Nifty 500

Nifty 500 is still in HH and HL structure weekly and trading above 13 EMA. 14900 is the immediate support, and the next support is 14100. If the broader market trades below 14000, the market might enter in deep correction instead of a pullback in the bull market.

International market

There are some uncertainly but till now there been no panic in the market.

Technical analysis of Banknifty across multiple time frame

Banknifty is very bearish in the daily chart and trading near 13 EMA in the weekly chart.

Banknifty broke 41209 (315deggree angle) and completed 5 cycles downwards from 27 Oct. 38025 is critical Gann level and  AVWAP level.

The next level is 37637, which is Gann level, as will AVWAP support for 28th July low. 

There is a gap of 50 points near 37500. 

As mentioned in banknifty levels as per Gann, price time square is also 375326 Nov6 Nov '2021 if the price breaks 38025 on the next trading day. 

Two subsequent Doji in daily might trigger a big trend soon.

Future Option data of banknifty for next expiry

  • Total call side OI 658407 
  • Total put side OI 406787 
  • PCR 0.63, and it is very close to the last one year PCR (.557) 
  • Max pain strike 38000
Options data indicate market participants took significant selling positions.

Astroview of banknifty for monthly expiry week

Monday - Moon will be Mrigshira star till 10:30. The day will be volatile.

Tuesday - It is a Rahu star day, so we might see a trend change pst 10:00 AM

Wednesday - Bullish day

How did weekly and monthly option trading strategies work today? 

Weekly Ironfly

Closed 40000 CE sell and rolled down to 39500 CE. 

Booked profit 1455

IRON fly payoff chart

IRON fly will be in some profit in downside. A reversal can give an excellent return to the strategy. I will continue with the plan till expiry with an expectation of reversal.

Update on monthly BATMAN strategy

Once the price traded below 38000 for more than 15 minutes, I moved long straddle from 39000 to 38000. Booked profit in 41000 call option.

Position update

Long straddle at 38000 4 lots 

Short put at 370000     14 lots 

Short call at 39500      14 lots

Payoff chart

Adjustment plan

If the market breaks last Thursday's low, I will shift 39500 CE sell to 39000 CE.
If the market breaks 37000, will create a short straddle at 37000 and adjust buy legs accordingly. 

Profit booked in BATMAN strategy: 75555

Total PnL after Day 4

Total profit booked on 18 Nov.: 77010 

Total profit as of 19 Nov. 2021:90506

The target of "2% within 10 days" was accomplished

I will continue to update this blog for all future journeys. This is my trade journal for analysis. Thanks for the excellent feedback received. That's are encouraging.

Disclaimer: These are not investment advice. I am just documenting my trades during my learning process. This is for entertainment and education purposes for all, including me. 

1 comment: