Bank Nifty makes predictable patterns & it is possible to predict its next level: Trader Ghanshyam

Discussion in 'Traders Corner' started by Michael Gonsalves, Jul 10, 2022.

  1. Michael Gonsalves

    Michael Gonsalves Member Staff Member

    Jun 26, 2016
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    Trader Ghanshyam has explained that the Bank Nifty makes predictable patterns & it is possible to say with reasonable accuracy as to how it will react when specific levels are breached. Based on this, we can take long or short positions with clearly defined profit targets & stop loss

    For most people, the movement of the Indices is random and unpredictable.

    However, traders who have mastered technical analysis say that there is a definite method in the madness of the market. One can plot levels on the chart and predict with reasonable accuracy as to what the market will do if and when those levels are reached.

    Ghanshyam has been regularly implementing this strategy and has achieved reasonable levels of success. His latest trade on expiry day yielded him a gain of Rs. 1.62 crore on a capital deployment of about Rs 2 crore. (see Trader Ghanshyam made a profit of Rs. 1.62 Cr by trading Bank Nifty options on expiry day).

    According to his latest analysis, the Bank Nifty is presently at its trend-line resistance of 35120. If it is not rejected from this level and if it consolidates around 35120 and makes a firm base, it is likely to move upwards to a level of 35440 and 35890.


    The level of 36000 will be the next firm resistance for the Bank Nifty.

    Traders who are already long should hold their positions with a stop loss of 34880. Till this level is not breached, the Bank Nifty will be in an uptrend.

    For tomorrow, i.e. Monday, 11th July, we have to keep our eyes on the level of 35255. If it opens flat and then crosses this level, we can go long for targets of 35380, 35480 and 35600. We can then buy the ATM Call of 35300 which will give the best bang for the buck.

    However, if it opens gap up at 35400 or 35500, we should avoid going long and can instead look for shorting opportunities at the first sign of rejection/ profit-booking.

    If the Bank Nifty opens soft, it has strong support at 35050 and 34900. We can conider going short only if these support levels buckle down and give way. Otherwise, it may be better to avoid short positions.

    Obviously, the best way to trade is through spreads i.e. Bull Call spread if we are going long and Bear Put spread if we are going short. If we are intending to trade with naked options, we must ensure that our position size is low.