PostMortem on BankNifty Today & Analysis of 14 Mar 2023
If you just saw the open & close price of
BANKNIFTY
, you would have missed the real drama of the day. A perfect day for the straddlers - but i am 100% confident none of the traders would have held onto their position till close to realize the full profits.
Must admit there was no trend like yesterday, but there was spike in volatility in between - we will analyze it one by one.
Open was quite inline at 39522 if we consider the price fall slope of yesterday. Then we had a strong dip in the 2nd candle ~ 206 pts swing. In the 3rd & 4th candle we had a counter swing ie upside ie 430pts and briefly hitting the resistance of 39742.
These 2 swings should have taken out the stop losses set by the traders who were doing straddles. Now from the resistance zone we had a decent rejection and downward continuation till 11.15 where we hit the low point of the day.
From 11.15 to 12.00 i felt all the premiums of the CE has died. Thats when i posted this.
"$BANKNIFTY at interesting point. CE premiums almost at low point, further credit spread sellers are looking at low rewards unless there is a pull back"
Its because for the credit spreads to happen, the seller needs good premium so that his position carries a favorable risk:reward. When the premiums are at the low point of the day - there is no incentive to sell options.
Quite magically bank nifty rose 488pts from 12.05 to 12.30 giving enough opportunity to the sellers to re-enter trades. This surge did not even touch the resistance level showing it was not a serious one.
What followed that was again a downward continuation - but notice the momentum was quite not there as yesterday for further breakdowns.
BANKNIFTY
managed to close near the open level giving some encouragement for the bulls to try their luck tomorrow.
Also the trades after 13.30 had no strength - it may be because of the FINNIFTY expiry happening.
---
15mts TF shows the first leg of the downfall getting formed. We will wait for a lower high to form to know if the downward trend is intact or not.
If it rises above the area it fell from ie above 40800+ levels we will have a trend negation pattern.
---
1hr TF should give some confidence to the bears as today's trade was below the crucial resistance of 39742. Also its below the range it broke down from.
If bank nifty enters back to the range, then the bearish bias will lose credibility soon and the range continuation may happen.
BANKNIFTY
, you would have missed the real drama of the day. A perfect day for the straddlers - but i am 100% confident none of the traders would have held onto their position till close to realize the full profits. Must admit there was no trend like yesterday, but there was spike in volatility in between - we will analyze it one by one.
Open was quite inline at 39522 if we consider the price fall slope of yesterday. Then we had a strong dip in the 2nd candle ~ 206 pts swing. In the 3rd & 4th candle we had a counter swing ie upside ie 430pts and briefly hitting the resistance of 39742.
These 2 swings should have taken out the stop losses set by the traders who were doing straddles. Now from the resistance zone we had a decent rejection and downward continuation till 11.15 where we hit the low point of the day.
From 11.15 to 12.00 i felt all the premiums of the CE has died. Thats when i posted this.
"$BANKNIFTY at interesting point. CE premiums almost at low point, further credit spread sellers are looking at low rewards unless there is a pull back"
Its because for the credit spreads to happen, the seller needs good premium so that his position carries a favorable risk:reward. When the premiums are at the low point of the day - there is no incentive to sell options.
Quite magically bank nifty rose 488pts from 12.05 to 12.30 giving enough opportunity to the sellers to re-enter trades. This surge did not even touch the resistance level showing it was not a serious one.
What followed that was again a downward continuation - but notice the momentum was quite not there as yesterday for further breakdowns.
BANKNIFTY
managed to close near the open level giving some encouragement for the bulls to try their luck tomorrow. Also the trades after 13.30 had no strength - it may be because of the FINNIFTY expiry happening.
---
15mts TF shows the first leg of the downfall getting formed. We will wait for a lower high to form to know if the downward trend is intact or not.
If it rises above the area it fell from ie above 40800+ levels we will have a trend negation pattern.
---
1hr TF should give some confidence to the bears as today's trade was below the crucial resistance of 39742. Also its below the range it broke down from.
If bank nifty enters back to the range, then the bearish bias will lose credibility soon and the range continuation may happen.
