A Gap-Down Open, Contrasting Setups, and a Frenzied Friday Finish

Once again, the market greeted traders with a gap-down start. Banknifty opened –206.60 points, while Nifty slipped –55.95 points.

Despite recent patterns of Nifty opening gap-down and closing in positive territory, I questioned myself whether today’s session might finally produce a bearish daily candle. Below is a chronological rundown of the trades, setups, and unexpected exits that defined the day.

Over the past four trading days, Nifty repeatedly opened lower but ended on a positive note—sometimes forming bullish candles. This time, I anticipated a shift to a negative / bearish candle due to cyclical probability.

Although Banknifty showed late recovery in previous sessions, it didn’t close strongly. The opening near yesterday’s low hinted at a possible red candle forming, especially if bulls failed to step in early.

Both indices looked poised for a potential breakout or breakdown from recent inside candles, suggesting a quick move to either the nearest resistance or support level once momentum arrived.

Within the first 5-minute candle, both Nifty and Banknifty filled their opening gaps. Even dropping to a 1-minute chart failed to reveal a definitive place to enter—momentum flashed by too quickly for a comfortable setup. Recognizing my indecision, I shifted to the 15-minute and 75-minute charts to gain a broader perspective.

Observing Nifty oscillating between 22,700 and 23,000, I pondered selling 23,000 CE alongside 22,700 PE—a strangle strategy—anticipating a sideways day. Ultimately, I abandoned that plan because:

• It was a non-expiry day (a Friday).
• I prefer capturing trends rather than range trades.

Banknifty’s broader range sat near 49,600 (resistance) and 48,500 (support).

While analyzing, I saw a bearish 15-minute candle form. The next candle skipped the typical retracement and extended downward, but I sold 49,600 CE at ₹210.95, aiming to grab a minimum of 50 points from the move. My rationale was the presence of a weak leg candle from February 19, which pointed to potential follow-through on the downside.

Simultaneously, a 15-minute bearish close in Nifty (below its day’s low) led me to sell 23,050 CE at ₹81.45. However, it showed less momentum than Banknifty. In the options chart, the day-low break never confirmed—a doji in green appeared instead. Despite noticing this discrepancy, I stuck to my small 4–5 point Stop Loss.

As the market drifted, I considered a hedge by buying 48,500 PE (Banknifty) or 22,700 PE (Nifty) in case a bullish reversal materialized. Due to margin constraints, I only managed to buy 48,500 PE at ₹197.05, which started fluctuating significantly and chipped into potential profits from the 49,600 CE short.

Banknifty eventually resumed falling, and I was close to hitting my target on 49,600 CE. Meanwhile, 48,500 PE moved from small gains to losses as price swings turned choppy. My focus wavered between securing my gains and exiting the losing hedge.

Suddenly, Nifty joined the downside, bringing some synergy to the market. I decided to:

• Close 48,500 PE at a small loss.
• Hold 49,600 CE short for its original profit target.

Around 10:15 AM, as Banknifty approached my target zone (near 48,811–48,890 support), I hit the “close all positions” button, expecting a confirmation popup for each trade. Instead, the system closed everything immediately. Though I still booked profits, I missed out on the final few points of the downward move. Meanwhile, in Nifty, I had wanted around 20 points from 23,050 CE but recognized the price was also nearing support around 22,700—so I might’ve exited soon anyway.

Final Exits:

• Nifty (23,050 CE) at ₹69.95
• Banknifty (49,600 CE) at ₹166.80

1. Avoid Range Trades on Non-Expiry Fridays: The market proved volatile, and attempts to set up strangles felt riskier without the time-decay advantage of an approaching expiry.
2. Validate Retracements: In Banknifty’s second 15-minute candle, no retracement formed, yet I forced the trade. While it turned out profitable, it wasn’t by the book.
3. Watch Discrepancies in the Options Chart: When the spot chart shows a strong bearish candle but the options chart prints a doji, reconsider your position or tighten Stop Losses.
4. Confirm “Close All” Orders: Accidental exits can disrupt otherwise well-planned trades. Familiarize yourself with your platform’s confirmation prompts.