Both Nifty and BankNifty are displaying bullish patterns on the charts, indicating potential upside momentum. However, there’s a critical concern—Call Option (CE) premiums are not favorable at the moment.
As an intraday trader, this poses a challenge: even if the index moves up, premium decay or weak pricing can eat into potential profits.
Key Warning: BankNifty Futures Must Close Above 49,000
For those looking to trade the upside, caution is necessary! BankNifty futures need to decisively close above 49,000 to confirm a safe upward move. Without this confirmation, upside trades carry risk.
Actionable Advice for Traders
Avoid aggressive longs until premiums stabilize
Monitor BankNifty’s closing levels carefully
Patience is key—wait for a clear breakout
Possible Scenarios:
- If BankNifty closes above 49K (futures) → Market could continue its bullish momentum. Upside trades become safer.
- If it fails to cross 49K convincingly → Expect some consolidation or even a dip, as bullish strength might weaken.
- Premiums indicate cautious sentiment → This could signal a lack of strong buying conviction, meaning a pullback is possible.
Verdict:
Decline is possible if BankNifty keeps rejecting 49K. Weak CE premiums also suggest traders aren’t pricing in aggressive upside. But unless we see a strong breakdown, expect range-bound moves rather than a sharp fall.
Would wait for price action confirmation before committing to downside trades.
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