PostMortem on BankNifty Today & Analysis of 03 APR 2023
We had a perfect trend continuation day today, see the purple line - the trades were in the same degree of slope as on the previous working day.
Banknifty opened at 40695 today and then slowly started climbing. We were in a small range of 40550 to 40690 between open and 12.05 - this was mainly because of the resistance level at 40704.
Once that resistance gave away bank nifty got the confidence to move up. Even still the momentum was lacking.
I really forgot that we have a holiday tomorrow 04 April 2023 due to Mahavir Jayanthi. Only when the options premium started dropping quite strongly I realized there is something wrong.
Even before looking the NSE holiday list, I quickly checked the FinNifty expiry day. The symbols showed as 03 Apr 2023. Usually FinNifty expiries are on the Tuesdays, but if Tuesday is a holiday - the expiry will be on Mondays.
BANKNIFTY
only gained 0.5% overall today, but the slow upward grind would have given headaches for the option buyers. The premiums were falling faster than the change in delta.
After crossing the 40704 resistance,
BANKNIFTY
came near the next resistance of 40880 and did not find the power or momentum to cross that. Final close was at 40815 - the bulls have the upper hand now and has really done the hard-work to come back from the lows of 38690 on 16 Mar 2023.
At that point in time I really thought we are going to break down, but what really happened was quite opposite to what I hoped.
---
We have an imperfect inverted head and shoulders pattern and then a breakaway gap (encircled in yellow). You can also see a purple downward sloping line. The price is just about to hit this purple line.
If I bring up the daily chart - it becomes more clear. The downward sloping purple line is the descending channel. I am depicting the bear market move of bank nifty. If this upper channel is broken conclusively then we are out of bear territory.
Usually what we see in bear periods are slow grinding downward falls with fast upside surges. These surges are brilliant opportunities to go further short.
As per this chart I will be closely watching this space if the big-boys are getting ready for their next round of selling. And I would like to join them in the 2nd phase.
Majority of the trading community are looking the current scenario as a bullish rally, I still believe these are relief rallies just to trap the bulls. Well I could be wrong too - stop losses are there for that !
So this new financial year FY23–24 has just started and I am planning to add
CNXFINANCE
to the trading arsenal especially the expiry day.
If BSE
BANK
option trading opportunity is provided by the brokers - then it will be of great help as Bankex has near 100% correlation with
BANKNIFTY
. And since I have spent my 99.99% time learning just 1 index - it will be easier to replicate the same trades.
I wish you a happy financial year ahead !
Banknifty opened at 40695 today and then slowly started climbing. We were in a small range of 40550 to 40690 between open and 12.05 - this was mainly because of the resistance level at 40704.
Once that resistance gave away bank nifty got the confidence to move up. Even still the momentum was lacking.
I really forgot that we have a holiday tomorrow 04 April 2023 due to Mahavir Jayanthi. Only when the options premium started dropping quite strongly I realized there is something wrong.
Even before looking the NSE holiday list, I quickly checked the FinNifty expiry day. The symbols showed as 03 Apr 2023. Usually FinNifty expiries are on the Tuesdays, but if Tuesday is a holiday - the expiry will be on Mondays.
BANKNIFTY
only gained 0.5% overall today, but the slow upward grind would have given headaches for the option buyers. The premiums were falling faster than the change in delta. After crossing the 40704 resistance,
BANKNIFTY
came near the next resistance of 40880 and did not find the power or momentum to cross that. Final close was at 40815 - the bulls have the upper hand now and has really done the hard-work to come back from the lows of 38690 on 16 Mar 2023. At that point in time I really thought we are going to break down, but what really happened was quite opposite to what I hoped.
---
We have an imperfect inverted head and shoulders pattern and then a breakaway gap (encircled in yellow). You can also see a purple downward sloping line. The price is just about to hit this purple line.
If I bring up the daily chart - it becomes more clear. The downward sloping purple line is the descending channel. I am depicting the bear market move of bank nifty. If this upper channel is broken conclusively then we are out of bear territory.
Usually what we see in bear periods are slow grinding downward falls with fast upside surges. These surges are brilliant opportunities to go further short.
As per this chart I will be closely watching this space if the big-boys are getting ready for their next round of selling. And I would like to join them in the 2nd phase.
Majority of the trading community are looking the current scenario as a bullish rally, I still believe these are relief rallies just to trap the bulls. Well I could be wrong too - stop losses are there for that !
So this new financial year FY23–24 has just started and I am planning to add
CNXFINANCE
to the trading arsenal especially the expiry day. If BSE
BANK
option trading opportunity is provided by the brokers - then it will be of great help as Bankex has near 100% correlation with
BANKNIFTY
. And since I have spent my 99.99% time learning just 1 index - it will be easier to replicate the same trades. I wish you a happy financial year ahead !
