Options trader's perception in positional trading

1. Long position buildup:

Establishing a long position indicates that more investors are expecting price increases and are holding long positions. This can be for a variety of reasons, including stocks that are in an oversold area, some good news about the stocks, or some positive global leads.

2. Short accumulation/buildup:

Short accumulation shows that more investors are expecting interest rates to fall and are making short bets. There are many reasons for this, such as stocks are in an oversold area or stocks have bad news.

3. Long unwinding/closing:

When a long position is closed, people start to sell a long position because some news or goals have been achieved. The reasons for closing a position for a long time may be different, but the result is the same.

4. Short covering:

Traders start buying stocks that they have sold before to close their positions or to exit the position with profit if they achieved what expected.

Banknifty trading setup for 06 September, 2021

 As depicted below, the Banknifty is moving in a channel (between blue lines) and 36500-36600 will act as major support. As as according to

1. If Banknifty takes support of  36500-36600 levels (look for price action means look for bullish candle pattern), then Banknifty will go to 36850 levels and/ or 37250 levels.

2. If Banknifty opens GAP-UP, then it will consolidate for a while, if breaks 36850 levels, then you can buy PUT with small quantity for 36600 levels or 150 points (approx.).

3. If open GAP-DOWN, then wait for the price action at 36500-36600 levels, it is recommended to avoid trading.

Banknifty broken the channel, finally

Weekly analysis: Let see what may happen in the next week of 06-September 2021 to 09-September, ot has only 4 trading days.

 As Banknifty (an NSE index for top 12 banks), has broken its bounded movement in a parallel channel and closed above 36500 levels and consolidating for a while. But a rejection is seen at the levels of 37000-37100 levels (may be waiting for some news to break it). If it breaks 37000-37100 (upwards) levels then we will see fast movement of 1000-1200 points or more till 1500 points.

But if it breaks the 36500 levels, downwards then panic selling will be started below 36000 levels which will bring down the Banknifty to 34500-34000 levels in this week or this month. But if it holds the fort above 36500 levels and consolidate and move towards 37000 levels, slowly, then you can buy Call, blindly for the fastest movement of the Banknifty.

Banknifty bounded in a Channel

 The banknifty is trading in a range of channel on daily basis candle, but it not went to the bottom of the channel (which it has to). It seems that amateur and novice buyers and seller are trapped in that range as to seek bottom of the channel. So, be aware of your trade setup.

Weekly view of Banknifty for intraday and positional traders

 As, the taper is postponed for a while, then look for the 35700 level to breakout and then buy call of 35700 CE or 35800 CE as per your convenience, this will give fast move of 150-250 points till 35850-35950 levels. But I think Banknifty will break 36000 level but wait for the range and then buy call 36000 CE if it breaks that range, it will give big move till 36500 levels as 36500 level is a major resistance in February-March trading session. 

 NOTE: Below chart is based on 15 minute candles.