Banknifty Futures Trade setup and Plan -week 30 July

Review and Recap:

BNF: Last week scenario II was to trade breakout above 27150 zone to test 27500 range, it went there and higher than that as well, testing yearly highs and beyond it.

Observations:

Challenge is prices have moved far off the vwap levels, and whenever it does a rotation towards vwap or consolidation is a better risk reward scenario, I have marked two times when that has happened recently

Trade Plan:

I.Prices manage to respect 27570 zones and we continue to move higher to test 27900 levels- which is a retracement of last weeks range and then look to trade a pullback from there. 

II.A move below 27570 range to test the levels of 27450- if that holds and markets pullback we are in for some up move more.

III.In continuation of scenario II preferable scenario is a move into the shaded zone of 27330-27250 range and look to trade a pullback from there, and that is the favored scenario this week.

IV.A contrarian scenario is markets to completely retrace this move and go on to test 27150-100 range all over again. Scenario has to be anyway tested first before that.

BANKNIFTY Futures trade set up and plan- coming sessions

Banknifty futures continue to trade within the range created on the 1^st week of june, that’s five weeks in a row, so much so that now a weekly plan almost looks like a daily plan from the range point of view.

But as a trader these are the times you need to continue to stay foot and don’t get complacent about positions and keep the plan going .

Coming back to the charts, Banknifty continue to trade and create value within the 38.2% - 78.2% retracement of the range. So until we get a confirmed close outside the range its best to trade a pullback to the range zones. There are two zones within this range that has good volumes 26540 on the higher side and 26360 on the down side. So here are the few trading scenarios coming to this week.

Trade plan scenarios:

1. Primary hypothesis remains to trade back within the range, despite gap up or gap downs. In case the chart set up support.  So on the upside until 26640 is breached look for a pullback to 26540, 26380 levels. And on the downside look for a pull back to 26360 levels  until 26150 hold
2. Trade a break out of 26640 to test  26790 and higher levels.
3. Trade a break down below 26160 to test 26980 , 26850 zones.

My own bias still remains on the short side , that essentially means I will be careful with positions size on the long side and be more aggressive with the position size on the down side if a short opportunity looks viable.