Derivatives

Is Nifty Bank facing barrier?

Akhil Nallamuthu |BL Research Bureau | Updated on: May 21, 2022

Index has been between 33,000 and 34,820 for the past couple of weeks

I am holding 300 Nifty Bank at 36,500. what should I do? In bearish trend what is the bottom? And for up move how much time it will take to touch 36,000? Please provide your valuable suggestion

Hitesh Italiya

Dear reader, had you given more information, we would have been able to give you appropriate response to your query. Here, we are assuming that you are holding Nifty Bank futures long position.

The underlying Nifty Bank index (34,311) is on a downtrend since early April this year after facing resistance at 38,750. Nevertheless, the index has been in a sideways crawl i.e., between 33,000 and 34,820 for the past couple of weeks. So, unless either of these levels are breached, the next leg of trend cannot be predicted. That said, the bias is bearish, and the index will most likely reverse lower either from 34,820 or 35,250. Therefore, we suggest you liquidate your longs at 34,800.

But in case if you are holding short positions, you can continue to hold as our broader view is bearish. Refer our weekly Index Outlook to know the important level and to get an idea on placing apt stop-loss and target levels.

On the other hand, if you are holding options, it would be better if you give us more information such as option type i.e., call or put, strike price, expiry etc. Yet in general, it may not be a good idea to buy options in a range market.

Send your queries to derivatives@thehindu.co.in

Published on May 21, 2022
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