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NIFTY might be bullish but BANKNIFTY is not.

Let's look at the daily chart of BANKNIFTY.

  1. We have started a base formation between 45000 and 44000 / 43500.

  2. Historical chart patterns give ample evidence that this is neither a bullish nor a bearish formation. It is an area of Random Gap Ups and Gap Downs.

  3. Even if we break 45000, BANKNIFTY chart will hardly look super bullish. If we break 44000 and touch 43500, that can be over selling and probable pin bar formation. Both the breakouts have to be backed by news.

  4. Not to forget that earning season has started.

Let us look at 2HR Chart of BANKNIFTY

  1. Only prudent thing while buying would be to expect a pause at 45000 and 43800 levels.

  2. Any position taken around 44000 is 50:50 as you dont know where the market will swing.

  3. Even if we break 45000, there is 45200 where there might be resistance.

Simply put, I am not expecting a secular trend on BANKNIFTY any more. There is hardly any room for clear upper side or lower side. Even if there is, its 1000 points that would be saddled by pull backs.


Let us look at NIFTY daily time frame chart.

  1. Above 19800 there is a room for touching 19800.

  2. That means there might be some bullishness in BANKNIFTY. So NIFTY might be bullish but BANKNIFTY might remain sideways or sideways bullish. This is the most confused statement ever to be written. What it means is that while majority component might push NIFTY up, some component might push BANKNIFTY up but not with the same fervour.

  3. Failure to sustain will open NIFTY for 19200 levels again.

Lets look at NIFTY 2HR charts now.

  1. 19900 is the clear hurdle and I will take bullish positions.

  2. Below 19680, I will turn bearish.

  3. In between, I am not taking any positions.

Given its earning season, keep an eye out on Earning Announcements of major heavy weights as that will cause spiks to either sides in NIFTY.

I will refrain from taking positions that are tilted heavily to either side.

Happy Trading

Rohit Katwa.

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