IS IT EASY TO TRADE IN BANKNIFTY OR NIFTY ?
- Nifty Comprise of Nifty FMCG, Nifty IT, Nifty MEDIA, Nifty METALS, Nifty PHARMA, Nifty PSU BANKS, Nifty PVT BANKS etc (Mix of stocks from all sectors).
- For analysing Nifty also you need to analyse banks.
- Where as Nifty Bank is just comprise of Mainly 10 Banks.
- Out of these 10 Banks - 5 Banks holds 87.83 % and 5 Banks hold 10.5 %, all remaining Banks just hold 1.67 % other than these 10 Banks.
- And only HDFC Bank & ICICI Bank holds almost 50 % of weightage.
- See the weightage given below which is as per NSE website on 30 Nov 2021.
NIFTY BANK weightage:- (First two are 50 % almost)
1. HDFC Bank Ltd = 27.51 %
2. ICICI Bank Ltd = 22.36 %
3. State Bank of India = 13.89 %
4. Kotak Mahindra Bank Ltd = 12.99 %
5. Axis Bank Ltd = 11.08 %
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Total = 87.83 %
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6. IndusInd Bank Ltd = 4.41 %
7. AU Small Finance Bank Ltd = 1.99 %
8. Bandhan Bank Ltd = 1.52 %
9. Federal Bank Ltd = 1.43 %
10. IDFC First Bank Ltd = 1.15 %
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Total = 10.5 %
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Grand Total = 98.33 %
- Remaining all other bank are just 1.67 % (Other than these 10 Banks).
- So if you Trade in Banknifty F&O - You can predict move of Banknifty just buy analysis Maximum 5 or Minimum 2 Banks.
- Maximum (HDFC Bank Ltd, ICICI Bank Ltd, State Bank of India, Kotak Mahindra Bank Ltd, Axis Bank Ltd).
- Minimum (HDFC Bank Ltd & ICICI Bank Ltd).
- You will also find that the charts of HDFC Bank & ICICI Bank are almost similar to Banknifty Charts.
- If you are expecting a big move in HDFC Bank or ICICI Bank - same can be expected in Banknifty if rest all banks are moving within limited range.
- See the charts or Fundamentals of HDFC Bank and ICICI Bank to know what Banknifty is planning in near future.
- So now you must have realised that less efforts are required to analyse and trade in Bnaknifty as compare to Nifty.
- Banknifty is more volatile as compare to Nifty so more moves can be captured, also Most of the indicators are lagging which require more volatile and trendy stock/Index to make profit.
- Also one more catch in seeing the volume in Banknifty Indices, for this you may make an indicator by adding volume of all these 10 Banks divided by 10 to get approx average Volume of Banknifty. Instead of an indicator you may also do it in Excel Sheet.
This is for Educational and paper trading purpose only. Must consult your financial advisor before investing or taking any position in the market. please correlate by yourself also on charts.
HOPE YOU LIKED THE STUDY
HAPPY TRADING !
- Nifty Comprise of Nifty FMCG, Nifty IT, Nifty MEDIA, Nifty METALS, Nifty PHARMA, Nifty PSU BANKS, Nifty PVT BANKS etc (Mix of stocks from all sectors).
- For analysing Nifty also you need to analyse banks.
- Where as Nifty Bank is just comprise of Mainly 10 Banks.
- Out of these 10 Banks - 5 Banks holds 87.83 % and 5 Banks hold 10.5 %, all remaining Banks just hold 1.67 % other than these 10 Banks.
- And only HDFC Bank & ICICI Bank holds almost 50 % of weightage.
- See the weightage given below which is as per NSE website on 30 Nov 2021.
NIFTY BANK weightage:- (First two are 50 % almost)
1. HDFC Bank Ltd = 27.51 %
2. ICICI Bank Ltd = 22.36 %
3. State Bank of India = 13.89 %
4. Kotak Mahindra Bank Ltd = 12.99 %
5. Axis Bank Ltd = 11.08 %
--------------------------------------------------
Total = 87.83 %
--------------------------------------------------
6. IndusInd Bank Ltd = 4.41 %
7. AU Small Finance Bank Ltd = 1.99 %
8. Bandhan Bank Ltd = 1.52 %
9. Federal Bank Ltd = 1.43 %
10. IDFC First Bank Ltd = 1.15 %
-------------------------------------------------
Total = 10.5 %
-------------------------------------------------
Grand Total = 98.33 %
- Remaining all other bank are just 1.67 % (Other than these 10 Banks).
- So if you Trade in Banknifty F&O - You can predict move of Banknifty just buy analysis Maximum 5 or Minimum 2 Banks.
- Maximum (HDFC Bank Ltd, ICICI Bank Ltd, State Bank of India, Kotak Mahindra Bank Ltd, Axis Bank Ltd).
- Minimum (HDFC Bank Ltd & ICICI Bank Ltd).
- You will also find that the charts of HDFC Bank & ICICI Bank are almost similar to Banknifty Charts.
- If you are expecting a big move in HDFC Bank or ICICI Bank - same can be expected in Banknifty if rest all banks are moving within limited range.
- See the charts or Fundamentals of HDFC Bank and ICICI Bank to know what Banknifty is planning in near future.
- So now you must have realised that less efforts are required to analyse and trade in Bnaknifty as compare to Nifty.
- Banknifty is more volatile as compare to Nifty so more moves can be captured, also Most of the indicators are lagging which require more volatile and trendy stock/Index to make profit.
- Also one more catch in seeing the volume in Banknifty Indices, for this you may make an indicator by adding volume of all these 10 Banks divided by 10 to get approx average Volume of Banknifty. Instead of an indicator you may also do it in Excel Sheet.
This is for Educational and paper trading purpose only. Must consult your financial advisor before investing or taking any position in the market. please correlate by yourself also on charts.
HOPE YOU LIKED THE STUDY
HAPPY TRADING !
