PostMortem on BankNifty Today & Analysis of 17 FEB 2023
So today's price action confirms the move that we had yesterday was not fake. How many traders & investors would have been trapped on the long side when the 41629 resistance broke out?
The prevailing trend was bearish, but when an important resistance gave away, it would have prompted lot of buyers into action. And once they deployed their funds we got the reversal. The dip could even be short term, may be it will negate in the coming week itself - but imagine the amount of money you would have lost over the last 2 days?
Today's move in
BANKNIFTY
was nothing dramatic, agree that many would call it unexpected. But for analysts who have been following the series of events after the meltdown in Adani stocks - this should have been a not so difficult picking.
Open was gap down at 41514 and the first 2 candles were in red - already doing the damage in opening 10mts. This set the trend rolling, we had a single leg of consistent fall of 1.57% ~ 652pts till 13.40.
The selling stopped near the 1st support level of 40868 and we also had a brief pull back of 0.65% ~ 267pts from 13.45 to 15.10.
This pull back ensured that the total fall of
BANKNIFTY
was only 1.2% ~ 499pts which is not so bad either. But there are some interesting things that happened
The spike in volume of CE options traded, showing intense writing. The volumes spiked just after
BANKNIFTY
made the pull back ensuring the option sellers got good premiums too.
The drop in options premium on the PE side after 14.50 aiding the view that the dip may not have further deep legs. If today's fall was that dramatic then the PE options should have retained their higher premiums.
It can also be true that the premiums could spike on monday or tuesday if we have continuation pattern. And most of you would have seen the % spikes PE premiums hit.
---
15mts TF has negated the small bullish view that it had on 15th. From there we had 1 support break & retest of the 2nd support level.
---
1hr TF may be showing the range widening possibilities in the coming weeks. This could be because the selling came in only when
BANKNIFTY
went over the resistance - a common phenomenon associated when sellers are in control.
The prevailing trend was bearish, but when an important resistance gave away, it would have prompted lot of buyers into action. And once they deployed their funds we got the reversal. The dip could even be short term, may be it will negate in the coming week itself - but imagine the amount of money you would have lost over the last 2 days?
Today's move in
BANKNIFTY
was nothing dramatic, agree that many would call it unexpected. But for analysts who have been following the series of events after the meltdown in Adani stocks - this should have been a not so difficult picking. Open was gap down at 41514 and the first 2 candles were in red - already doing the damage in opening 10mts. This set the trend rolling, we had a single leg of consistent fall of 1.57% ~ 652pts till 13.40.
The selling stopped near the 1st support level of 40868 and we also had a brief pull back of 0.65% ~ 267pts from 13.45 to 15.10.
This pull back ensured that the total fall of
BANKNIFTY
was only 1.2% ~ 499pts which is not so bad either. But there are some interesting things that happened The spike in volume of CE options traded, showing intense writing. The volumes spiked just after
BANKNIFTY
made the pull back ensuring the option sellers got good premiums too. The drop in options premium on the PE side after 14.50 aiding the view that the dip may not have further deep legs. If today's fall was that dramatic then the PE options should have retained their higher premiums.
It can also be true that the premiums could spike on monday or tuesday if we have continuation pattern. And most of you would have seen the % spikes PE premiums hit.
---
15mts TF has negated the small bullish view that it had on 15th. From there we had 1 support break & retest of the 2nd support level.
---
1hr TF may be showing the range widening possibilities in the coming weeks. This could be because the selling came in only when
BANKNIFTY
went over the resistance - a common phenomenon associated when sellers are in control.