14 Feb ’24 — BankNifty takes out the resistance and goes neutral
BankNifty Analysis - Stance Neutral ➡️
BankNifty does the impossible today, the reason we are saying this is because, despite a UP day yesterday, BN was unable to get past the resistance of 45399. See what happened today - we opened gap-down and by 10.55 we were back at the resistance level of 45399. The rejection made sense then as the mood was still bearish and little we did know what the remainder of the day had in store. The elongated encircled region is when BN was still negotiating in and around the SR level. Once it got past that - the next test was at the purple descending trend line (which we drew yesterday). That was also kind of accurate as on 3 instances we had a contact.
4mts chart
The climb of 670pts from 14.07 to 14.39 made all the difference today. It drove our algo into a tailspin and ensured that we booked the highest intraday loss till now. You might already know most algos prefer to play straddle or strangles and today being the expiry day created more trouble. The calls when sold were damn cheap and when the stop loss got hit - it appreciated more than 100 to 200%. Yesterday we pointed out the unusual skew in the PUT and CALL premiums, the calls staying cheap. Today we fell victim to that.
63mts chart
We have another W pattern today and since the resistance is breached, it is a good sign for the bulls. Overall our stance is now revised to neutral from bearish. What is more interesting is that BN has a perfect at-par close with the last expiry i.e. 7th Feb. The first thing we will be looking out for tomorrow is to see if there is follow-up buying or whether what we witnessed today was just a blip.
Algo Trading
Our BankNifty algo trades ended today with a loss of 11805.
BankNifty does the impossible today, the reason we are saying this is because, despite a UP day yesterday, BN was unable to get past the resistance of 45399. See what happened today - we opened gap-down and by 10.55 we were back at the resistance level of 45399. The rejection made sense then as the mood was still bearish and little we did know what the remainder of the day had in store. The elongated encircled region is when BN was still negotiating in and around the SR level. Once it got past that - the next test was at the purple descending trend line (which we drew yesterday). That was also kind of accurate as on 3 instances we had a contact.
4mts chart
The climb of 670pts from 14.07 to 14.39 made all the difference today. It drove our algo into a tailspin and ensured that we booked the highest intraday loss till now. You might already know most algos prefer to play straddle or strangles and today being the expiry day created more trouble. The calls when sold were damn cheap and when the stop loss got hit - it appreciated more than 100 to 200%. Yesterday we pointed out the unusual skew in the PUT and CALL premiums, the calls staying cheap. Today we fell victim to that.
63mts chart
We have another W pattern today and since the resistance is breached, it is a good sign for the bulls. Overall our stance is now revised to neutral from bearish. What is more interesting is that BN has a perfect at-par close with the last expiry i.e. 7th Feb. The first thing we will be looking out for tomorrow is to see if there is follow-up buying or whether what we witnessed today was just a blip.
Algo Trading
Our BankNifty algo trades ended today with a loss of 11805.
