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Trade the Strangle in the Bank Nifty

Apr 22, 2022

The Bank Nifty index is one of the big underperforming indices against the NSE Nifty since February 2021.

The recent momentum in the Nifty is led by Reliance Industries. The correction in HDFC Bank, with a weightage of about 28%, has kept the Bank Nifty under pressure.

Technically, the Bank Nifty index is trending between the canals of gaps. The resistance is placed at 37,400 and the support at 35,800.

Bank Nifty Index Support at 36,200

 

The rise yesterday resisted at the key psychological of 37,000 and 100 HEMA (Hourly Exponential Moving Average) which was placed at 36,914.

Additionally, the less tracked 22 degrees rising trendline has a support at 36,200 around the gap area.

As an options trader, the best strategy to play the setup is the short strangle till the index continues to trade in the mentioned range.

Traders must understand the risk involved in shorting options is unlimited. Trade with a strict stoploss.

At present, the Bank Nifty index is trading down 1.5% at 36,270 while the Nifty is down 1% at 17,200.

In the Bank Nifty index, SBI, Kotak Bank, and Axis Bank are the top losers.

I'll share more on his trend on my Telegram group. If you're interested in being part of my charting journey as I share how to create wealth from profitable trade setups, join my telegram channel - Fast Profits Daily.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...

Brijesh Bhatia

Brijesh Bhatia Research Analyst and expert chartist, is the editor of Alpha Wave Profits. Fully committed to his craft, Brijesh has mastered the art of making money by trading using technical analysis. Brijesh has an MBA from ICFAI and 16 years of experience in India's financial markets. He began his career on Dalal Street as commodities dealer and it wasn't long before he developed his own unique trading system. Brijesh worked on his trading system until it could be expected to deliver 5 units of return for every unit of risk.

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