BANKNIFTY : Trading levels and Plan for 04-Dec-2024Bank Nifty Trading Plan for 04-Dec-2024 📈
On the previous trading day, Bank Nifty experienced sharp upward move after opening and close with in a range ( mentioned in yesterday's plan), particularly in the deep retracement zone between 113%-127% of the last swing high, highlighting a potential exhaustion of sellers. The price action near ₹52,893 indicates failing demand, which may lead to profit booking. The levels around ₹53,051 act as a probable resistance zone, while initial support lies near ₹52,504. Yellow indicates a sideways trend, green shows bullish momentum, and red signifies bearish trends.
Here’s a structured trading plan for all opening scenarios:
Gap Up Opening (+200 points or more above ₹52,661)
Resistance Zone Focus (₹52,893-₹53,051): A gap-up opening near or above ₹52,893 will push the index into a potential resistance zone. Watch for rejection patterns, such as bearish engulfing, to confirm profit booking.
Action Plan:
Entry: Short near ₹53,051 after a bearish confirmation.
Target: ₹52,661 (current price level) and ₹52,504 (initial retracement zone).
Stop Loss: Above ₹53,150 to manage risk.
Breakout Potential Above ₹53,051: Sustained buying above ₹53,051 could lead to further upside toward ₹53,456.
Action Plan:
Entry: Long above ₹53,051 after a 15-minute candle closes above this level.
Target: ₹53,300-₹53,456.
Stop Loss: Below ₹52,893 to avoid false breakouts.
Flat Opening (Near ₹52,661)
Opening Support (₹52,504-₹52,661): If the market opens flat, initial focus should remain on whether Bank Nifty sustains above ₹52,504. A break below this level could trigger further downside.
Action Plan for Bullish Scenario:
Entry: Long above ₹52,661 with strong buying momentum.
Target: ₹52,893 and ₹53,051.
Stop Loss: Below ₹52,500 to limit downside risk.
Action Plan for Bearish Scenario:
Entry: Short below ₹52,504 with selling pressure confirmation.
Target: ₹52,222 (last support for intraday).
Stop Loss: Above ₹52,661 for safety.
Retracement Levels Monitoring (₹52,504): If the price trades sideways near ₹52,504, look for breakout patterns in either direction to confirm the trend.
Gap Down Opening (-200 points or more below ₹52,661)
Testing Demand Zone (₹52,222): A gap-down opening below ₹52,504 will test the last intraday support zone around ₹52,222. Failure to hold this level could intensify the bearish momentum.
Action Plan:
Entry: Short below ₹52,222 after bearish confirmation.
Target: ₹52,000-₹51,800 (extended retracement zones).
Stop Loss: Above ₹52,350 to minimize risk.
Reversal Potential at ₹52,222: Watch for bullish reversal patterns like hammers or bullish engulfing candlesticks near ₹52,222.
Action Plan:
Entry: Long near ₹52,222 with a confirmed reversal.
Target: ₹52,504 and ₹52,661.
Stop Loss: Below ₹52,100 to manage risk.
Risk Management Tips for Options Trading
Adopt strict stop-loss discipline to avoid large losses, especially in volatile conditions.
Trade with limited risk strategies like iron condors or debit spreads to manage margin requirements.
Focus on option strikes with sufficient liquidity (At-The-Money or slightly Out-Of-The-Money options).
Avoid over-leveraging; trade only with capital you can afford to lose.
Use a defined reward-to-risk ratio (preferably 2:1 or higher).
Summary and Conclusion
The Bank Nifty is trading near crucial zones, with ₹52,893 as a key resistance area and ₹52,504 acting as the immediate support. A breach above ₹53,051 could lead to bullish momentum, while a fall below ₹52,222 would extend bearish trends. Stick to the plan, wait for confirmation, and execute with discipline.
Disclaimer:
I am not a SEBI-registered analyst. This analysis is for educational purposes only. Please consult your financial advisor or conduct your research before making any trading decisions.
