PostMortem on BankNifty Today & Analysis of 13 Mar 2023
Bears would have been happy today seeing the supports getting broken, i am quite sure the level of shorts in CE options taken to capitalize on the fall we had today. 46500 CE was traded for 1,45,47,750 volume ~ 1.45 crore. This is the farthest away strike in the weekly series.
I would say its a brand new record !
Eventhough we had a -2.27% ~ 920pts drop day, the sentiment was not looking exactly bearish during the opening 10mts. In fact lot of traders were suggesting to go bullish.
Thats when i posted this "The bulls have no fear ! its going to be a suicide…" on banknifty minds
We had a 0.82% ~ 322pts upward move by 09.25 before cracking. And the fall afterwards was a 45 degree fall with literally no pull back.
See the yellow slanting line showing the simple downward move. Psychologically it meant there was very little buying momentum. The reason was the fall in Silicon valley bank in US & the fear that other credit & lending institutions, banks may be impacted.
According to me, the fall we had today was nothing dramatic, after all its just a 3% fall. Just compare it to the beating the US banks are taking in - 70%, 60%, 25% falls in a day.
People still believe Indian banks will not be impacted when US banks collapse - its just wishful thinking. Any bank in any part of the world, if its going down due to liquidity issue, interest rate issue or defaults - it will spread quickly to the other parts of the globe.
The bank under discussion, SVB funds startups, VCs & other tech companies in which a good percentage of talents are from India. If they are fully settled in US and not supporting a family in India or not transacting or remitting to India (they are fine). If not - they will definitely be attached via some local bank here. A job loss or cash withdrawal restriction or moratorium for them in US will definitely create a ripple here too.
SVB's collapse was just because of the rumor that the depositors may not be able to get their money out due to a loss they faced in a bond transaction. If all the depositors run to the bank at the same time to withdraw their balance - the bank will cripple.
In India - if all the
SBIN
account holders decide to just withdraw Rs25000 cash all on the same day, it will create a similar scenario. But it will not happen in India, thats because SBI staffs combined at all 17000+ will not be able to attend
45 crore customers within the 8 hours of operations. SBI will not have 11.25 lakh crore as liquid cash anyway, infact its similar to the currency in circulation at the moment.
---
15mts TF shows the supports getting broken - the bias has now shifted to the negative side. The good work done from the 27th Feb is now gone in 2 sessions.
---
On the 1hr TF we have lots to discuss. Remember over the last few reports we mentioned how
BANKNIFTY
is stuck in the range from 27th Jan. Today we had a conclusive break of the 39742 support level on the 1hr TF (although the candle formed is green color)
We also discussed the possibility that how the momentum is going to accelerate because of the time spent in range.
The bearish pattern will continue only if the further trades are taking place below 39742, only then the descending channel pattern makes sense.
Also marked in cyan color the M type pattern formed, again to make sense the further trades has to happen below the 39742 level - otherwise an equally similar W pattern is also visible.
to view all 8 charts in today's discussion visit viswaram. com
I would say its a brand new record !
Eventhough we had a -2.27% ~ 920pts drop day, the sentiment was not looking exactly bearish during the opening 10mts. In fact lot of traders were suggesting to go bullish.
Thats when i posted this "The bulls have no fear ! its going to be a suicide…" on banknifty minds
We had a 0.82% ~ 322pts upward move by 09.25 before cracking. And the fall afterwards was a 45 degree fall with literally no pull back.
See the yellow slanting line showing the simple downward move. Psychologically it meant there was very little buying momentum. The reason was the fall in Silicon valley bank in US & the fear that other credit & lending institutions, banks may be impacted.
According to me, the fall we had today was nothing dramatic, after all its just a 3% fall. Just compare it to the beating the US banks are taking in - 70%, 60%, 25% falls in a day.
People still believe Indian banks will not be impacted when US banks collapse - its just wishful thinking. Any bank in any part of the world, if its going down due to liquidity issue, interest rate issue or defaults - it will spread quickly to the other parts of the globe.
The bank under discussion, SVB funds startups, VCs & other tech companies in which a good percentage of talents are from India. If they are fully settled in US and not supporting a family in India or not transacting or remitting to India (they are fine). If not - they will definitely be attached via some local bank here. A job loss or cash withdrawal restriction or moratorium for them in US will definitely create a ripple here too.
SVB's collapse was just because of the rumor that the depositors may not be able to get their money out due to a loss they faced in a bond transaction. If all the depositors run to the bank at the same time to withdraw their balance - the bank will cripple.
In India - if all the
SBIN
account holders decide to just withdraw Rs25000 cash all on the same day, it will create a similar scenario. But it will not happen in India, thats because SBI staffs combined at all 17000+ will not be able to attend 45 crore customers within the 8 hours of operations. SBI will not have 11.25 lakh crore as liquid cash anyway, infact its similar to the currency in circulation at the moment.
---
15mts TF shows the supports getting broken - the bias has now shifted to the negative side. The good work done from the 27th Feb is now gone in 2 sessions.
---
On the 1hr TF we have lots to discuss. Remember over the last few reports we mentioned how
BANKNIFTY
is stuck in the range from 27th Jan. Today we had a conclusive break of the 39742 support level on the 1hr TF (although the candle formed is green color) We also discussed the possibility that how the momentum is going to accelerate because of the time spent in range.
The bearish pattern will continue only if the further trades are taking place below 39742, only then the descending channel pattern makes sense.
Also marked in cyan color the M type pattern formed, again to make sense the further trades has to happen below the 39742 level - otherwise an equally similar W pattern is also visible.
to view all 8 charts in today's discussion visit viswaram. com
