BANKNIFTY : Trading levels and plan for 27-Dec-2024
Intro: Yesterday's Plan vs. Actual
In yesterday's plan, we anticipated critical levels such as the Liquidity Buildup Zone around 51,213 and a potential test of the Resistance for Consolidation Zone at 51,805. The market opened near the expected range, showing sideways movement (Yellow Trend) during the early session. A breakout above 51,568 eventually triggered a bullish rally (Green Trend), validating our target at 51,956-52,072.
Let’s prepare for 27-Dec-2024 with an educational approach to all scenarios.
Detailed Trading Plan for 27-Dec-2024
Gap-Up Opening (+200 points or more above 51,400):
If Bank Nifty opens with a significant gap-up, monitor the Opening Resistance at 51,568. Sustained trading above this level indicates a continuation towards the Resistance for Consolidation at 51,805. A breakout above 51,805 may lead to a rally targeting the Profit Booking Zone at 51,956-52,072.
⚠️ Action Plan: Wait for a retest of 51,568 for confirmation before entering long positions. Early entry without confirmation increases the risk of false breakouts.
💡 Risk Management Tip: For options trading, consider bull call spreads to hedge against a sudden pullback.
Flat Opening (Near 51,213-51,400):
In case of a flat opening, Bank Nifty is likely to consolidate within the Golden Retracement Zone of 51,173-51,213. This zone can act as a pivot for directional moves. A bullish breakout above 51,213 signals upside momentum, while a breakdown below 51,173 may lead to bearish pressure.
⚠️ Action Plan: Observe the first 30 minutes for price action. For bullish entries, target 51,568 and above. For bearish trades, look for confirmation of rejection at 51,173, targeting 50,850.
💡 Risk Management Tip: Use tight stop losses for trades within this zone to avoid getting trapped in sideways movements.
Gap-Down Opening (-200 points or more below 51,213):
If Bank Nifty opens below 51,213, immediate support lies at Last Intraday Support around 50,850. A breakdown below 50,850 may extend the bearish trend (Red Trend) towards the Buyer’s Support Zone at 50,463-50,302. Look for potential reversals at these key levels for contrarian trades.
⚠️ Action Plan: Avoid panic selling at the open. Instead, wait for confirmation of breakdowns or reversals before taking trades. A reversal at 50,463 could present excellent risk-reward opportunities for long positions.
💡 Risk Management Tip: Hedge your positions with put spreads in case of continued bearish momentum.
Summary and Conclusion
For 27-Dec-2024, the focus should be on the Opening Resistance Zone at 51,568 and Golden Retracement Zone at 51,173-51,213. Gap-up and flat openings demand patience and confirmation for directional trades. A gap-down could offer contrarian opportunities at deeper support levels. Always prioritize risk management through proper position sizing and option strategies.
⚠️ Disclaimer: I am not a SEBI-registered analyst. This plan is for educational purposes only. Traders are advised to conduct their analysis or consult with financial advisors before executing trades.
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