PostMortem on BankNifty Today & Analysis of 01 NOV 2022
Bank nifty ended today’s trade flat with a drop of only 0.04%, but i feel the price action was on the negative side. BN opened gap up at 41552 made a red candle first 5mts, and then rallied all the way to 41656 by 09.50.
The change in options premium on the PE side was indicating further upmove — you can check the surge in premiums of far OTM PEs. I was also of the view that bank nifty may scale further up.
But the price action from 11.25 to 12.00 was quite strange and the volume of shorts added at CE side made me curious. I had to change by view from long to short because of the options premium spike at CEs now.
The premiums did not lie, the trend was strong and BN broke the support of 41314 by 13.00. Although the trades from 13.15 to close did not aid the direction — the strength in the red candles were quite strong.
If there is no change in the global macros tomorrow, i personally expect bank nifty to trade lower as the entire day’s price action seemed negative.
Just looking at the PE volume traded, can extrapolate the intense speculation done. 71.9 lakhs volume traded for 30500 PE, 26.6 lakhs on 31000 PE
The call side option writing also was intense, 41.9 lakhs volume on 46500 CE & 26 lakhs on 46000 CE
5mts chart on major banks were showing contradicting price action today
HDFC bank showed immense resilience today
Axis bank fell with momentum — we could expect some news or event this week
ICICI bank opened gap up, went below yesterday’s close by an equal extent and then closed flat
SBI, Kotak & IndusInd closed with gains but the price action seemed negative for me.
Today’s trade selection would have confused even the experienced of traders. Primarily because BN is at all time high and we dont have a resistance level after the gap up open today
First option would have been to go long as soon as the first candle top was taken out ie at 09.40 — but this would not have given profit as it was a false breakout
The fall from 11.25 to 13.15 was strong and did cover a good area — but you would not have shorted it because 41600 was no strong level. Ideally we would have shorted once the support line was broken at 13.05 — but this trade also would have gone into loss as the next 8 moves were up.
The only profitable trade you could have taken would be to do far OTM short strangle with a stop loss & exited at 3.20pm today.
SPX and Bank nifty are not converging yet, BN is up +7.87% and SPX down -11.2%
If the US markets close well in green today due to change in macro or fundamentals — then our market will also advance tomorrow.
15mts shows sideways movement only
1hr also shows sideways movement only
Bank nifty support & resistance levels
s1: 40867, s2: 40691
r1: 41312, r2: ATH
PS: Read the standard disclaimer at: bit. ly/3Nm3RER
The change in options premium on the PE side was indicating further upmove — you can check the surge in premiums of far OTM PEs. I was also of the view that bank nifty may scale further up.
But the price action from 11.25 to 12.00 was quite strange and the volume of shorts added at CE side made me curious. I had to change by view from long to short because of the options premium spike at CEs now.
The premiums did not lie, the trend was strong and BN broke the support of 41314 by 13.00. Although the trades from 13.15 to close did not aid the direction — the strength in the red candles were quite strong.
If there is no change in the global macros tomorrow, i personally expect bank nifty to trade lower as the entire day’s price action seemed negative.
Just looking at the PE volume traded, can extrapolate the intense speculation done. 71.9 lakhs volume traded for 30500 PE, 26.6 lakhs on 31000 PE
The call side option writing also was intense, 41.9 lakhs volume on 46500 CE & 26 lakhs on 46000 CE
5mts chart on major banks were showing contradicting price action today
HDFC bank showed immense resilience today
Axis bank fell with momentum — we could expect some news or event this week
ICICI bank opened gap up, went below yesterday’s close by an equal extent and then closed flat
SBI, Kotak & IndusInd closed with gains but the price action seemed negative for me.
Today’s trade selection would have confused even the experienced of traders. Primarily because BN is at all time high and we dont have a resistance level after the gap up open today
First option would have been to go long as soon as the first candle top was taken out ie at 09.40 — but this would not have given profit as it was a false breakout
The fall from 11.25 to 13.15 was strong and did cover a good area — but you would not have shorted it because 41600 was no strong level. Ideally we would have shorted once the support line was broken at 13.05 — but this trade also would have gone into loss as the next 8 moves were up.
The only profitable trade you could have taken would be to do far OTM short strangle with a stop loss & exited at 3.20pm today.
SPX and Bank nifty are not converging yet, BN is up +7.87% and SPX down -11.2%
If the US markets close well in green today due to change in macro or fundamentals — then our market will also advance tomorrow.
15mts shows sideways movement only
1hr also shows sideways movement only
Bank nifty support & resistance levels
s1: 40867, s2: 40691
r1: 41312, r2: ATH
PS: Read the standard disclaimer at: bit. ly/3Nm3RER
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