03 Jul '23 Post Mortem on BankNifty

BN had a different style of price action today comparing with N50. The open was gap-up & the rush to hit the HOD at 09.55 was similar. But what followed from there had minor changes.
1. The fall of 0.69% ~ 312pts from the top did have an impact on the momentum
2. Unlike N50, BN did not persist at the HOD levels after the first retracement. N50 had 3 more attempts at the top, it even ended at the top. One of the reason would be surge in stocks like ITC & RELIANCE which are not part of BN.

From the options flow I could not detect any aggressive shorts getting written for BN unlike N50 - so I am not calling a top for BN today!

Tomorrow's Finnifty expiry might really set the tone for banknifty as well. And the HDFC-HDFCBK merger, delisting & relisting has to be contained. If HDFCBK assumes 44 to 46% in banknifty & Finnifty - it wont look good from an index management perspective. Quite sure the officials will do something on it soon.

1hr TF
Today's island formation really stands out, unlike N50 the other 3 days are not perfect islands as BN has closed the gaps quite cleanly.

The nearest support is at 44068 ie 1100pts below. These are uncharted territory & the price behavior could get even more volatile. Always remember to wear your options trading seat-belts for BN :)


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