Banknifty did a blasting up move yesterday, as expected breaching 37200 was the trigger.
Government approved the bad bank which will take care of the toxic assets of all the financial institutions and help release the capital. Thereby freeing them to release credit into the system. More liquidity in the system.
Govt will give guarantee fo these bad assets upto five years and has set up NACRL to resolve these assets.
So all banks which were teetering in bad loans had respite yesterday, psu Index was up 5 %. Idea, yes, indues all were up big.
Now if yesterday high is crossed Banknifty may not stop till 40k.
Sell puts and if banknifty reverses only then calls.