BANKNIFTY 3RD Week-December-Technical Analysis

If you trade in BANKNIFTY derivatives like futures contracts or options contracts, this post will provide you with upcoming trade setups in it.

If you are just getting started with BANKNIFTY,you should read our beginners guide on BANKNIFTY.

We have seen an uptrend continuation in BANKNIFTY last week.

Below you can see, how BANKNIFTY rallied 1228 points from 11th December low of 25598.95.

BANKNIFTY rallied 1228 points

Upcoming week trade setup in BANKNIFTY

There is a big resistance range in BANKNIFTY between 27136-27553 on daily charts. So it could be either a sudden breakout or consolidation and then break out upside.

BANKNIFTY resistance between 27136-27553

So what could be a better trade setup in BANKNIFTY right now ??

I would use 3 trading strategy in this scenario :

1.Buying at breakout

Will look to buy Banknifty futures as soon as it touches 26952 and will place 26723 as stop loss with a target of 27305.

Breakout trade setup in BANKNIFTY

2.Buying at the nearest support level

If BANKNIFTY falls and trades in between the nearest support 26644-26359, that’s a buying opportunity and will buy BANKNIFTY futures contract.

Will keep nearest 60 min time frame chart support as stop loss.

3.Selling OTM contracts of BANKNIFTY using our calculator

If BANKNIFTY suddenly gaps up next week, my ideal choice will be to sell OTM options contracts.

When I used our calculator with the current price of BANKNIFTY, it shows two strike price to sell.

Best OTM strike price to sell in BANKNIFTY options as per our calculator for current price is

  • 27500 CE-CMP-24
  • 26100 PE-CMP-28

You will receive a net credit of 52*20=Rs 1040.

Simultaneously selling both OTM 27500 CE and 26100 PE is the right approach instead of just selling one strike price.

If you are trading with a discount broker, this is a good profit for you.

Stop loss in this selling strategy needs more understanding.

And you should learn trade adjustment to come out of situations when market’s move against you.

If you want to execute selling OTM strategy in BANKNIFTY on Monday, use our strike price selections calculator and give current price with no of days for expiry as 4.

You will see our calculator displaying two strike price with a little high premium and which are close to the current price of BANKNIFTY.

If you don’t know what to do if a trade goes against you, kindly avoid this strategy.

Weekly Fibonacci extension target for BANKNIFTY

We have taken swing low of March 2018, swing high of August 2018 and another swing low of October 2018 to draw 100 % Fibonacci extension as BANKNIFTY weekly targets.

Below chart shows you how we placed a Fibonacci extension for targets.

Weekly Fibonacci extension target for BANKNIFTY

As per fib extensions, the future target for BANKNIFTY is 28950.

What’s your view ??-Use comment section below

Kindly let me know what is your view of current BANKNIFTY and how will you trade it ??

If you feel that I missed out on some crucial points in this analysis kindly type in the comment section.

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