Bank Nifty and Nifty future and options setup review 22 October

Here are review of Bank Nifty and Nifty future and options Setups of 22 October 2020

In Bank Nifty and Nifty setup review series, I explain trade setups appears in Nifty and Bank Nifty on a daily basis. I am writing this blog for educational purpose only.

Price action is an art to understand price behaviour. If you try to study the chart aftermarket every day you will eventually start to see nice setups in real-time chart also. That will make you a successful trader.

Though it is easy to see setups in hindsight and difficult to spot in real-time. Unless you practice everyday aftermarket you will never be going to see them.

So let’s get started. 

Bank Nifty Future and Options Setup

Bank Nifty 5 minute spot chart with 20 period Exponential Moving average

  1. The first candle of the day is a very big candle with bull body and tail on both sides. Today is also weekly expiry. As per my observation, this type of candle marks both high and low of the day and market moves in between the candle for the rest of the day.
  2. Doji inside candle forming at the low of the day in a possible range day. This is a good scalp long and swing long as well.
  3. A two-legged pullback to EMA. But the candle is largely overlapped by last several candles and it is below the EMA. For Long entry, you should wait for another setup.
  4. Bull inside candle. Breakout pullback of a small trend line and EMA pullback. Second entry to go long for the test of the high of the day.
  5. Bear Inside Candle. The candle before it is climatic and tested the high of the day. As the day is a range day all good setups occur at the high and low of the day. Short for scalp and swing.
  6. A strong bullish candle at the test of the low of the day. This is also a double bottom bull flag pattern and EMA gap candle. Good to go long.
  7. Small candle and EMA pull back.
  8. Strong bear candle. Breakout pullback of a small trend line. Short scalp.
  9. Doji candle with bullish body forming at the new low of the day. EMA gap candle in a trading range day. In traditional candlestick analysis, this is a spinning top candle. Good to go for a long entry.

Nifty Future and Option Setups

Let’s go to the Nifty Chart. This is 5-minute Nifty spot chart. Let me clarify one thing. If you are trading Nifty or Bank Nifty future you don’t need to see spot chart. Only one chart is sufficient to take a trade. If you are trading option, then only you should see spot chart. Because you can not trade option with option chart alone.

Nifty 5 minute spot chart of 22 October 2020
  1. The market is clearly moving in a range. In this kind of market, only one strategy works and that is selling at swing highs and buying at swing lows and EMA Gaps. This is a strong bear candle. Double top pullback and EMA gap bar short.
  2. A strong bullish candle at the test of the days low. Should be a long trade.
  3. This is a failed breakout of a trend line and test of a swing high. It has become a strong resistance because the price has already tried and failed to surpass this level twice already.
  4. Doji with a bull body which is called a spinning top candle. This is also a wedge reversal pattern and EMA gap candle in a range day. Good long scalp.

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