Postmortem on #BankNifty - 10 OCT 2022
SPX fell 2.8% & NDQ 3.88% on friday and the handout to us today morning was not that positive. As expected bank nifty opened gap down 38461 below the support level of 38698. The first candle was bearish, closed down & may have indicated that the rest of the day will be negative.
But what happened in the next 2 candles were the opposite, a hammer the 2nd candle and a bullish marubozu 3rd. The 3rd candle took out the now resistance indicating the day will not be negative but will trade above the 38698 level.
And what happened from 10.10 to 12.50 was magic, for a moment i thought bank nifty is really on drugs. How does it find the strength to rally 700+ points on a negative macro day.
Notice the price action between 12.30 to 13.00 below, it was right at the resistance level of 39326. BN did not break this resistance and then reversed course to a nice fall till 14.10.
From 14.15 to close, BN regained some strength and closed quite strong according to me.
Due to the rally today, the IVs were dropping and i could not really enter into any trade. I was expecting the option premiums to double and the IVs to skyrocket - but that did not happen.
The traded volume on options were higher, but the premiums were lower indicating a range bound expiry so far this week. However these dynamics can change if the support or resistance is broken - you know how easy it is for bank nifty to send the options premium to the sky. Rs10 to Rs160 will not take even an hour.
5mts TF - does not show bearishness yet. The current pattern shows consolidation with a bullish bias
1hr TF also does not show the bearishness yet - price consolidation at current levels is what i infer
Bank nifty important support and resistance liness1:38698, s2: 37946r1: 39326, r2: 39739
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But what happened in the next 2 candles were the opposite, a hammer the 2nd candle and a bullish marubozu 3rd. The 3rd candle took out the now resistance indicating the day will not be negative but will trade above the 38698 level.
And what happened from 10.10 to 12.50 was magic, for a moment i thought bank nifty is really on drugs. How does it find the strength to rally 700+ points on a negative macro day.
Notice the price action between 12.30 to 13.00 below, it was right at the resistance level of 39326. BN did not break this resistance and then reversed course to a nice fall till 14.10.
From 14.15 to close, BN regained some strength and closed quite strong according to me.
Due to the rally today, the IVs were dropping and i could not really enter into any trade. I was expecting the option premiums to double and the IVs to skyrocket - but that did not happen.
The traded volume on options were higher, but the premiums were lower indicating a range bound expiry so far this week. However these dynamics can change if the support or resistance is broken - you know how easy it is for bank nifty to send the options premium to the sky. Rs10 to Rs160 will not take even an hour.
5mts TF - does not show bearishness yet. The current pattern shows consolidation with a bullish bias
1hr TF also does not show the bearishness yet - price consolidation at current levels is what i infer
Bank nifty important support and resistance liness1:38698, s2: 37946r1: 39326, r2: 39739
Thanks for reading Viswaram Finance! Subscribe for free to receive new posts and support my work.
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