Trade setup for Nifty and banknifty indices for monday using price action

Introduction

My Analysis for identifying  a  Trade setup in nifty 50 will be done using four hour candlestick chart. I will not be using any other indicator and purely rely on  naked price action .   The same procedure will also be followed on Bank nifty ( the banking index ) . Please Check out our “Disclaimer” Policy Before going forward. You Can check the disclaimer policy over here.

Index Analysis

Nifty 50

Four Hour Chart of Nifty 50.

Now we will analyse the setup.

  • Nifty 50 was in an uptrend as the Market was making newer highs and newer lows from 10,500.
  • The index Made  an all time high of 11,738 and saw some selling from those levels.
  • Bulls  tried to break The all time high again.
  • But as soon as prices came near to 11,700. Bulls did become weak and bears kicked in .
  • The index rallied downwards almost vertically till the levels of 11400.
  • There was some short covering which was seen on those levels.
  • The prices again rallied from 11,400 till 11,600.

Now let us analyse the candle at Blue arrow mark.

  • The index was recovering form the lows of 11,400.
  • A candle prior to the Marked Candle.
  • We can see a complete showcase of strength form the bulls.
  • As the Bulls get in at the low price and close the candle at the highs with no wicks.
  • But the candle following is a spinning top candle. which is a reversal candle.
  • The spinning top candle after such a outrageous bull candle tells us that the sellers are not dead.
  • They are looking to make a comeback.

Read more about spinning tops over here.

Now the spinning top appears at a position  which could possibly look like a new lower high for the market. The markets have to break their previous highs (i.e) 11,740 if they are bullish. They also have to break the low of 11 ,230 to be considered a downwards or bearish market. With the US Markets also looking weak there are higher probabilities for the Indian markets to break 11 ,230 levels. Which makes my view bearish for Nifty 50.

Bank Nifty

Four Hour Chart of Bank nifty.

Now we will analyse the setup.

  • Bank Nifty  was in an uptrend as the Market was making newer highs and newer lows from 26,000.
  • The index Made  an all time high of 28,400 and saw some selling from those levels.
  • Bulls  tried to break The all time high again.
  • But as soon as prices came near to 28,400. Bulls did become weak and bears kicked in .
  • The index rallied downwards almost vertically till the previous highs of 28,149.
  • There was some short covering which was seen on those levels.
  • The prices again rallied from 28,149 till 28,500.

Now let us analyse the candle at Blue arrow mark.

  • The index was recovering form the lows of 28,149.
  • A candle prior to the Marked Candle.
  • We can see a complete showcase of strength form the bulls.
  • As the Bulls get in at the low price and close the candle above the low point leaving a long wick.
  • But the candle following is a spinning top candle. which is a reversal candle.
  • The spinning top candle after such a Failed  bearish  candle tells us that the sellers are not dead.
  • AS the sellers did not allow the Buyers to break the levels of 26,600.
  • Which is a Signal that the sellers are looking to comeback.

Now the spinning top appears at a position  which could possibly look like a new lower high for the market. . With the US Markets and Nifty  also looking weak there are higher probabilities that  bank nifty might be bearish .

Conclusion

After Going through the charts my view for tomorrow’s market is bearish. As both Nifty and Bank nifty index forming a spinning top candle after some recovery bulls is signalling sign of weakness in the markets at higher levels . Please Check out our “Disclaimer” Policy Before going forward. You Can check the disclaimer policy over here.

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