Banknifty Structure Analysis & Trade Plan: 8th October

The Bank Nifty closed on Tuesday, October 7, by sustaining its strong bullish momentum, but faced a rejection near the upper end of its current ascending channel. This suggests bulls are struggling to break the supply zone quickly.

Detailed Market Structure Breakdown

4-Hour Chart (Macro Trend)

Structure: The Bank Nifty is in a strong, aggressive bullish trend and has confirmed a powerful reversal from the 54,250 base. The price is now trading within a clear ascending channel, with Monday and Tuesday's action pushing it right up to the major supply zone. The strong rejection wick on the 4H chart confirms seller activity near 56,400.

Key Levels:

Major Supply (Resistance): 56,400 - 56,600. This area is a significant Order Block (OB) and will be the major hurdle for bulls. A decisive breakout here is needed for the rally to extend toward 57,000.

Major Demand (Support): 55,400 - 55,600. This area, which includes the lower trendline of the ascending channel and a prior resistance flip, is the new, crucial support.

Outlook: The short-term bias is sideways-to-bullish. The market is expected to consolidate or correct shallowly before attempting another break of the supply zone.

1-Hour Chart (Intermediate View)

Structure: The 1H chart shows the market briefly hit the 56,400 resistance and faced a sharp rejection, causing the price to retreat. The index is still well within its ascending channel, and the close suggests a temporary pause is likely.

Key Levels:

Immediate Resistance: 56,400 (The high of Tuesday's session).

Immediate Support: 56,000 (The psychological level and the middle of the recent bullish move).

15-Minute Chart (Intraday View)

Structure: The 15M chart shows a clear Market Structure Shift (MSS) to the downside in the last few hours of trading, as the price sold off sharply from the 56,400 high. This suggests an intraday profit-booking/correction phase is set to continue.

Key Levels:

Intraday Supply: 56,300.

Intraday Demand: 56,000 - 56,050.

Outlook: Slightly Bearish (Correction/Consolidation).

📈 Trade Plan (Wednesday, 8th October)

Market Outlook: Bank Nifty is nearing a major supply zone and is due for a healthy consolidation. The strategy should be to buy on dips to the channel support or short a failure at the overhead resistance.

Bullish Scenario (Primary Plan: Buy on Dips)

Justification: The overall structure is bullish. The next move is likely a higher low before a breakout attempt.

Entry: Look for a long entry on a retest of the 55,700 - 55,800 support zone (lower channel trendline) that shows a bullish reversal candle.

Stop Loss (SL): Place a stop loss below 55,600.

Targets:

T1: 56,400 (Retest of Tuesday's high).

T2: 56,600 (Breakout target/Major supply zone).

Bearish Scenario (Counter-Trend: Short at Resistance/Breakdown)

Justification: Profit-booking at the 56,400 supply zone is strong.

Trigger 1 (Failure to Break): Short entry if 56,400 is tested and rejected with a bearish candle.

Trigger 2 (Breakdown): Short entry on a decisive break and 15-minute candle close below 55,600.

Stop Loss (SL): Above 56,450.

Targets:

T1: 55,400 (Lower channel trendline).

T2: 55,200 (Major FVG support).

Key Levels for Observation:

Immediate Decision Point: 55,800 - 56,400 zone.

Bullish Confirmation: A break and sustained move above 56,400.

Bearish Warning: A move below 55,600 would suggest the correction is deepening.

Line in the Sand: 55,400. Below this level, the short-term uptrend is vulnerable.