PostMortem on BankNifty Today & Analysis of 30 JAN 2023
Again we had a 4 support & resistance zone in play today, the price action formed is also quite tricky. The most commendable part is the conviction of bulls to rally
BANKNIFTY
in the last 90mts and close it in green.
In essence who could have really predicted the close in green, just look at where it opened 39856 right near the SR zone of 39839 makes an indecisive first candle and then 3 consecutive green candles full of strength to take out 2 consecutive resistance lines.
A 2.81% ~ 1113 pts rally from the opening low to HOD in opening 15mts - this really cooled down the IV as well as options premium. I am so sure that many would have lost the opportunity to sell options due to this 15mts unpredictable move.
From the HOD we had a gradual but deep cut, basically as 2 legs. leg1 from 09.35 to 10.55 with a drop of 2.04% ~ 832 pts and then from 12.10 to 13.50 a drop of 1.83% ~ 734 pts.
The final 90mts, bank nifty retraced all this back to close in green, so we had a 2.6% ~ 1025pts rally from 13.55 to close.
Due to this high volatile moves today - the premiums of many option strikes did swing up & down creating perfect shorting & buying opportunities. When it all ended - the premiums of both the PE as well as CEs had fallen below last session possibly hinting at a flattish trade for tomorrow.
If we look at the 15mts chart, see blue line - the price action was continuing from the last session except for the opening candle. The last 6 candles showing attempt to recover - but from the time frame it may show up as start of another leg.
The degree of slope changes if we go to the 1hr chart thats because the length of the candles be it green or red are very high - showing an expansion in volatility. To be bullish bank nifty would have to negate the fall and go above the recent swing high. Because the fall has been quite strong, its healthy if BN can spend some time here before rising - otherwise the shorts will push it down further.
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Among the bank nifty components:
HDFCBANK
had the perfect chart correlation with bank nifty today, the opening minutes 2.72% rise, gradual fall of 2.62% and the last 90mts rise of 2.23 %all the same.
ICICIBANK
also followed a similar trajectory, opening 3.71% up, a fall of 3.46% and then a rise of 3.45%
SBIN
was more volatile during the same period, up 3.93%, a fall of 4.83% and then a rise of 2.82%. Its chart is not showing as exiting the bearish pattern yet.
AXISBANK
even though had rise & fall just like peers - the chart pattern showed flattishness. Opening rise of 3.97%, fall of 3.96% and then a final rally of 2.97%
KOTAKBANK
had a relatively lower swing variation today, up 2.44% opening minutes, down 1.58% in a gradual manner and then a final rally of 1.57%.
INDUSINDBK
had a different chart pattern than the above banks, its chart showing immense bearishness - even the final rally could not help it get above water. The fall from HOD to LOD was a huge 5.94%.
We have 2 major events this week
Union Budget 2023 on Feb 01
US FED interest rate decision on Feb 02
If market has to rally or breakdown we need both the events to be biased on the same sentiment. Either both positive or both negative.
To view the 4 charts discussed today, visit viswaram. com
BANKNIFTY
in the last 90mts and close it in green. In essence who could have really predicted the close in green, just look at where it opened 39856 right near the SR zone of 39839 makes an indecisive first candle and then 3 consecutive green candles full of strength to take out 2 consecutive resistance lines.
A 2.81% ~ 1113 pts rally from the opening low to HOD in opening 15mts - this really cooled down the IV as well as options premium. I am so sure that many would have lost the opportunity to sell options due to this 15mts unpredictable move.
From the HOD we had a gradual but deep cut, basically as 2 legs. leg1 from 09.35 to 10.55 with a drop of 2.04% ~ 832 pts and then from 12.10 to 13.50 a drop of 1.83% ~ 734 pts.
The final 90mts, bank nifty retraced all this back to close in green, so we had a 2.6% ~ 1025pts rally from 13.55 to close.
Due to this high volatile moves today - the premiums of many option strikes did swing up & down creating perfect shorting & buying opportunities. When it all ended - the premiums of both the PE as well as CEs had fallen below last session possibly hinting at a flattish trade for tomorrow.
If we look at the 15mts chart, see blue line - the price action was continuing from the last session except for the opening candle. The last 6 candles showing attempt to recover - but from the time frame it may show up as start of another leg.
The degree of slope changes if we go to the 1hr chart thats because the length of the candles be it green or red are very high - showing an expansion in volatility. To be bullish bank nifty would have to negate the fall and go above the recent swing high. Because the fall has been quite strong, its healthy if BN can spend some time here before rising - otherwise the shorts will push it down further.
---
Among the bank nifty components:
HDFCBANK
had the perfect chart correlation with bank nifty today, the opening minutes 2.72% rise, gradual fall of 2.62% and the last 90mts rise of 2.23 %all the same.
ICICIBANK
also followed a similar trajectory, opening 3.71% up, a fall of 3.46% and then a rise of 3.45%
SBIN
was more volatile during the same period, up 3.93%, a fall of 4.83% and then a rise of 2.82%. Its chart is not showing as exiting the bearish pattern yet.
AXISBANK
even though had rise & fall just like peers - the chart pattern showed flattishness. Opening rise of 3.97%, fall of 3.96% and then a final rally of 2.97%
KOTAKBANK
had a relatively lower swing variation today, up 2.44% opening minutes, down 1.58% in a gradual manner and then a final rally of 1.57%.
INDUSINDBK
had a different chart pattern than the above banks, its chart showing immense bearishness - even the final rally could not help it get above water. The fall from HOD to LOD was a huge 5.94%. We have 2 major events this week
Union Budget 2023 on Feb 01
US FED interest rate decision on Feb 02
If market has to rally or breakdown we need both the events to be biased on the same sentiment. Either both positive or both negative.
To view the 4 charts discussed today, visit viswaram. com
