BANKNIFTY : Levels, prediction and Plan for 19-Dec-2024Intro: Previous Day's Plan vs Actual
In yesterday's trading plan, BankNifty tested the Wave C Support Zone near 51,903 - 52,068 as highlighted in yesterday's trading plan, showing indecision within the sideways range (Yellow Trend). As expected, the index respected the completion zone for Wave C and stayed above the support area for most of the session. However, no clear breakout or breakdown occurred.
Now, for 19-Dec-2024, we will plan for three potential opening scenarios: Gap Up, Flat, and Gap Down, considering a gap opening of 200+ points. The key levels and actionable strategies are explained below.
Trading Scenarios for 19-Dec-2024
Gap Up Opening (200+ points):
If Bank Nifty opens above the Resistance for Sideways Trade at 52,647, it indicates bullish sentiment.
- Monitor the first 30 minutes for a sustained breakout above this level. If the price holds above 52,647, the next target will be the Last Intraday Resistance at 53,039.
- However, failure to sustain above 52,647 may lead to a retracement back to the Opening Resistance at 52,381.
- Action Plan:
- Initiate long positions only if an hourly candle closes above **52,647**, with targets at **53,039**.
- If price fails to sustain and shows weakness, wait for retracement back to **52,381** for possible re-entry opportunities.
Flat Opening:
If Bank Nifty opens near the Opening Resistance at 52,381, it signals indecision, and price may move sideways (Yellow Trend) before providing direction.
- A breakout above 52,381 can trigger a move toward the Resistance for Sideways Trade (52,647), while a breakdown below 52,205 (previous close) could drag prices back toward the Wave C Completion Zone at 52,068 - 51,903.
- Action Plan:
- Avoid trading immediately after the open. Let price break above **52,381** for bullish trades, targeting **52,647**.
- A breakdown below **52,205** could signal short opportunities with targets at **52,068** and **51,903**.
- Manage risk by placing stops based on an hourly candle close above/below these levels.
Gap Down Opening (200+ points):
If Bank Nifty opens near or below the Wave C Completion Zone (52,068 - 51,903), it signals bearish momentum.
- Look for signs of support formation in this zone, as prices could take a reversal from here (Green Trend).
- Failure to hold 51,903 could lead to further downside towards the critical support at 51,418 (red trend).
- Action Plan:
- Look for long opportunities if Bank Nifty holds above **51,903** with confirmation (hourly close), targeting a bounce back to **52,205** and then **52,381**.
- If price decisively breaks below **51,903**, consider short trades toward **51,418**, with a strict stop loss above **52,068**.
Risk Management Tips for Options Traders :
Use spreads like Bull Call Spreads for bullish moves or Bear Put Spreads for downside moves to limit risks in volatile openings.
Avoid trading during the first 15-30 minutes if opening is erratic or near key levels like the Wave C zone. Let the price stabilize.
Always place stop losses on an hourly candle close basis for better risk management.
Avoid over-leveraging; focus on maintaining a favorable risk-reward ratio (minimum 1:2).
Summary and Conclusion:
Bank Nifty remains at a crucial juncture near the Wave C Completion Zone.
Key Levels to Watch:
Upside: 52,381, 52,647, 53,039
Downside: 52,205, 52,068, 51,903, and 51,418
Yellow Trend reflects sideways price action, Green Trend signals bullish reversals, and Red Trend highlights bearish continuation.
Focus on price action near key levels, and avoid trading in uncertain zones.
Disclaimer: I am not a SEBI-registered analyst. This trading plan is for educational purposes only. Traders should conduct their analysis or consult a financial advisor before making decisions.
