Bank Nifty - H&S pattern?
Updated
In 4H chart for Bank Nifty , Right shoulder seems to be forming . Though H&S formations are rare and should considered in long time frames, this time even external factors of US-China tussle and COVID may really help in the completion of the formation.
So the strategy to handle the H&S is to first wait for the confirmation if the BN levels don't cross upwards of 22500 levels on 21st July and it reaches neckline on 23rd July.
23rd Jul is also the weekly option expiry date and hence high volatility may ensure H and S formation to real success or failure on the same day or get postponed to next day
In case of H&S (bearish) is successful the we can expect BN to fall back to 19500-19000 levels and any failure to cross the neck line may take BN to 25000+ level.
As the price can go anyway , best is buy strangle of 24000 CE and 19500 PE of 30th July expiration.
Cost conscious traders can sell strangle of same price level for 23th Expiry along with buying the strangle for 30th July expiry.
So the strategy to handle the H&S is to first wait for the confirmation if the BN levels don't cross upwards of 22500 levels on 21st July and it reaches neckline on 23rd July.
23rd Jul is also the weekly option expiry date and hence high volatility may ensure H and S formation to real success or failure on the same day or get postponed to next day
In case of H&S (bearish) is successful the we can expect BN to fall back to 19500-19000 levels and any failure to cross the neck line may take BN to 25000+ level.
As the price can go anyway , best is buy strangle of 24000 CE and 19500 PE of 30th July expiration.
Cost conscious traders can sell strangle of same price level for 23th Expiry along with buying the strangle for 30th July expiry.
Trade active
Bought naked put @20500Note
will close the above position if the BN moves upwards the 22500 on closing basisTrade closed: stop reached
closed the postion...
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