Get started

Bankniftypostmortem

1st Nov ’23 Perfect day for 9:20 straddlers BankNifty PostMortemBankNifty Weekly Expiry Analysis Between the last expiry and today, BankNifty has managed to climb 432pts ~ 1.02%. It has also managed to trade above the support/resistance of 42576. This retracement could be seen as a lower-high formation for continued selling pressure. For proof, we would need to see the 42576 getting knocked out in the upcoming sessions. BankNifty Today Analysis Unexpected, but Banknifty had a perfectly neutral price action today. Most of the trades were carried out between 42770 & 42643 today i.e. a swing range of 127pts. I can say with 70% confidence that the major reason Nifty50 did not take out its support was due to lack of participation from BankNifty today. BN only fell 0.34% today vs Nifty which fell 0.47%. BankNifty had a gap down open and its close was almost at the same level. There were 2 attempts to fall, the best one was between 12.30 to 13.15 - but the support of 42576 was respected. Being the expiry today - a flattish BankNifty would have filled the pocket of the straddlers. It is not that common to get textbook-like straddle conditions. My personal trades in BankNifty did not last long as the premiums were dropping pretty quickly. I switched back to Nifty50 when its OTM had juice left. Also, remember - when the index is perfectly flat with no volatility - the OTM premiums will be pretty low. I have highlighted the support/resistance points that are crowded around the spot in blue color. Till 42576 is not broken, I cannot go bearish. Not just that, it has to take out the swing low of 42105 on the same day 42576 is taken out - just to ensure that the momentum is good enough.
NSE:BANKNIFTY
by viswaram
31st Oct ’23 - BankNifty stuck between support & resistanceBankNifty Analysis Further clues for Nifty50’s movement might be hidden in BankNifty’s price action. Unlike Nifty, BankNifty has crowded support & resistance lines nearby that may impact the trend movement. The only way out is to come up with a big RED or GREEN candle break the support/resistance and ensure the momentum picks up. The open (43264) was around the resistance level of 43253. We had a rejection in the opening candle itself. The first pause was at the support level of 43012 which was hit by 09.30. From 09.30 to 11.35, Banknifty was stuck in this zone. At 11.40, I thought the 2nd leg of the down move may be building up - but it was a false flag. BankNifty managed to crawl back to the resistance of 43012 by 13.05. It spent the next 1hr 45mts in this SR zone. Interestingly the price action from 14.50 to 15.00 (3 candles) was very interesting. I still think the clue for the next big move is hidden in this. Why do you think we had that move otherwise? We are exactly at the same level as of 27th October. For the last 3 days, I have maintained the neutral call and somehow the markets are kind of obliging. If 42576 gets broken tomorrow, I will be highly excited to look for shorting opportunities. Since it is the weekly expiry tomorrow, I hope we can get some deep price movements.
NSE:BANKNIFTY
by viswaram
30th Oct ’23 - Neutral on BankNifty till 43404, bulls are back?BankNifty Analysis Since BankNifty is in the neighbourhood of support and resistance, it is quite easy to explain with examples. The open was almost inline but we started dropping fast. We gave up 438pts ~ 1.02% by 09.40. Unlike Nifty50, I did not find it that encouraging to look out for bearish opportunities. The main reason is the decay of premiums. None of the OTM strikes had excess juice for the squeeze - so I just chose not to participate. At 09.20 we had the first breach of 42576 support, the strong red candle was ample proof of strength. On its way back 3 strong green candles negated the 42576 resistance. Then between 13.00 to 13.20 we had a smooth rejection of resistance2 at 43012. My mistake was to assume that we would close below 43012, this was proven wrong between 15.00 to 15.20 when this level was taken out. On the 1hr TF the next level to watch out on the upside is 43253 followed by 43404. If we were to fall 42576 has to be taken out pretty quickly and the next support comes only at 41624 - so the bears need to have strong momentum. I wish to maintain my neutral stance till 43404 is not taken out.
NSE:BANKNIFTY
by viswaram
27th Oct ’23 - Bears taking some rest before the next move?BankNifty Analysis During periods of trend reversals, BankNifty will act as the leading indicator. I hope that will work out in this period as well. Today’s price action is quite too early to say if we have reversed the bearish trend - because it was mostly support and resistance play. BN started around the 42576 zone and held its ground confirming the lack of momentum of the bears (as of now). It could also be a day of rest as we had strong price moves already this week. BN was unable to climb back upto the resistance zone of 43012 - indicating lower strength of the bulls as well. Till we get clarity if its a reversal or trend continuation, I wish to change my stance to neutral from bearish. The resistance points above the spot are 43012 and 43253. The support zones are 42576 & 41624. Yesterday we discussed the importance of 41624, since it comes at a drop of 1158 points - the bears have to really exert that much pressure. This reassures the decision to take some rest and build up the momentum for the next move.
NSE:BANKNIFTY
by viswaram
26th Oct ’23 - BankNifty retests the levels seen on 11 Nov 2022BankNifty Weekly Expiry Analysis BankNifty had 1 extra in this week as the last expiry was on Wednesday. But the extra day was cut short as we had a scheduled holiday (Dussehra) in between. BankNifty did not fall as much as Nifty, it fell only 3.64% ~ 1597pts compared to 3.9% on Nifty. The premiums on the option strikes were not good enough except today. But I am quite sure BankNifty has already done its part by leading this trend reversal well ahead. BankNifty Today Analysis There were 2 interesting patterns in the chart today. Firstly we did not open as badly as Nifty, we were only 0.31% ~ 131pts gap-down. Secondly, the percentage fall on BankNifty was well below Nifty50 for most of the duration today. After the gap-down open we fell another 599pts ~ 1.40% before gaining support and then retracing 262pts ~ 0.62%. Only between 11.10 to 11.45 the percent fall was much greater than Nifty50. What that means is BankNifty was showing reluctance to fall and even when it did - it managed to crawl back up. I am not suggesting a bottom is in place - but the bears are not as strong on BN as they are on N50. A look at the daily chart will help you solve that confusion. The next marked support in my chart is 41624 which is 656pts below today’s closing. We might need a strong red candle to get there - this may help push the momentum for the bears. According to me the cuts in BankNifty has to exceed the cuts in Nifty more than the weightage it exerts - only then a strong downward trend will materialize. If you look at the levels today, we have retouched the zones of 17 Apr 2023, 25 Jan 2023, 22 Dec 2022, 11 Nov 2022. When 42280 was first hit on 11/11/2022 - it was a new all-time high that day. I would like to maintain my bearish stance and expect BN to trade between 42576 and 41624 for tomorrow.
NSE:BANKNIFTYShort
by viswaram
25th Oct ’23 - Pure support & resistance play - 42576 nxt level?BankNifty Analysis BankNifty was a pure support and resistance play today. If you had seen my charts earlier - you would have seen the marked SR zones and noticed how we reacted to 3 of those levels today. Open was gap-up above the 43253 SR level. We went up to 43404 zone and got rejected and came back. We spent some time back at the 43253 levels with no special directional intent. The options flow was perfectly in sync with this non-directional bias for this short period. The rejection of 43253 came at 12.00 (strong red candle) and we cut through the 43012 SR level by 12.40 (another strong red candle). From there we retested the 43012 level at 14.10 & 14.15 only to be rejected. One of the reasons BankNifty held its ground today was due to these closely stacked support/resistance levels if not we should have fallen more than Nifty50 today. On the 1hr TF, the next level to watch out is 42576. Below that there is a big gap till 41624, which means if we manage to break 42576 tomorrow - the next fall is going to be steep enough. BN will have its expiry along with Nifty50 tomorrow and I wish to maintain my bearish stance.
NSE:BANKNIFTYShort
by viswaram
23rd Oct ’23 - BankNifty is well below the 28th June levelsBankNifty Analysis BankNifty on the other hand had a gap up open, thanks to the excellent results from ICICI Bank. To a great extent, BankNifty resisted the down move on Nifty. Even till 13.55, it was only 0.17% below the previous close. But right after that, it fell like a house of cards. Whatever support ICICI gave till then was undone. ICICI ended up closing negative 0.3%, remember that it stayed green till 14.55. An intraday swing of 2.06%. BankNifty also broke 2 supports today, 43404 and 43253, both of them after 14.55. These supports offered no protection today, the momentum to cruise through was that strong. Fortunately, the 43012 support (3rd support) was held today. On the daily time frame, BankNifty has already undone the 28th June adventure. We are now trading at levels seen in the first week of May. The next major support after 43012 comes at 42576 and then at 42130. Going by the depth of the red candle today - it is quite likely that we retest those levels quickly.
NSE:BANKNIFTYShort
by viswaram
1
20th Oct ’23 - Unwilling to Die attitude from BankNiftyBankNifty Analysis The greatest surprise of today came from BankNifty. A perfect flat closing today. I was hoping for a 400+ pts fall today considering how the global indices ended the trade yesterday, also how the US banks were tanking. The resilience Indian banks showed today deserves special mention. If you look at the price action today, we went green by 09.35 and then had a range-bound trade. At 13.15 we had a 114pts surge super-strong green candle, but we quickly retraced that. If BankNifty had fallen just as much as Nifty50 today - the entire story would have been different. The immense weight BN has over N50 ensured the cuts are not that deep. On the hourly time frame, things look still bearish as the 44068 resistance still stands. I agree that we did not have momentum today, but if we stay in this zone - the selling will intensify. My targets of 43404 and 43253 remain unchanged.
NSE:BANKNIFTYShort
by viswaram
19th Oct ’23 - BankNifty the main villain for the bears todayBankNifty Analysis The main villain who spoiled the plans for the bears is BankNifty. We had an opening candle swing of 333pts on the downside, but the price action was not looking that bearish for some or other reason. Ideally, we are below the support level of 44068 and any down-swing should have created an avalanche of shorts. Instead, we started climbing back right from the 2nd candle. Leg 1 was complete by 11.25, that 5mts candle alone contributed 189pts and took BN into green territory. The 2nd leg of the upside came between 13.20 to 14.05. Notice from the chart how the support/resistance level of 44063 came into play today. We had a rejection at 14.05 and BankNifty started moving downwards. Even though we climbed 503pts ~ 1.16% between the intraday low to high - the rejection at resistance proves the point that we are still bearish. Of the targets set yesterday, 43735 was broken and we got pretty close to 43519. We are getting back to the zone that has good support/resistance marked from the prior price actions. My new targets for tomorrow will be 43404 and 43253 if we are continuing to move downwards. If we go upwards - no action is really required unless 44068 is broken. India VIX closed at 10.8975 and US VIX is trading at 19.67 the difference between them a whopping 80%. Noting it - in case we do not see drastic variance again.
NSE:BANKNIFTYShort
by viswaram
18th Oct ’23 - BN leader during trend reversals - PostMortem BankNifty Expiry Analysis Between the last expiry and today, BankNifty lost 630pts and almost 82% of that came today. Interestingly the stable support level of 44068 is now breached. Remember we went below this level on 31-Aug, 04-Oct and 09-Oct and we managed to climb back every time. Will it be different this time? BankNifty Today Analysis The leader during reversals is always BankNifty and it is visible today also. Nifty had a similar opening candle, but the next few minutes were negating it and moved up. BankNifty on the other hand did not go up strongly. The fall from 44390 was almost 519pts ~ 1.17% which cut through the support of 44068 with so much ease. Remember this was the same support zone that had rejected all 4 prior fall attempts. After falling below the 44068 levels, there was no attempt to climb back - a sign that bulls may have lost control. If it stays below this level for tomorrow, the selling is just going to intensify. On the 1hr chart, the 10.15 candle that took out 422pts ~ 0.95% stands highlighted. Never before did we have such a strong candle right at the support area - going by the intensity, looks like further move may come on the downside instead of rejection. What really caused this panic selling? Not sure. Surprisingly the India VIX is still at 10.96 and US VIX is at 19.00 - the gap between them is a whopping 73.3%. Ideally, the implied volatility has to pick up for strong downward price action. A glimpse of that was very much visible in the options prices today. Going by the options flow and since we broke the support, I wish to change my stance to bearish. My first target would be 43735 and then 43519.
NSE:BANKNIFTYShort
by viswaram
17th Oct ’23 - BankNifty still neutral till 44650 - PostMortemBankNifty Analysis BankNifty also had a similar chart pattern as of Nifty50. A gap-up open of 345pts ~ 0.78% and then a steady period till 13.20. Fell 208pts ~ 0.47% in 50mts and then recovered for close. HDFCBK did quite well even after the declaration of the results. The gap-up on hdfcbank was the main reason both Nifty and BankNifty had an unusual start. In fact HDFCBANK had a similar chart as that of BN as well as N50, except for the period 13.20 to 14.10 wherein HDFCBK fell only 0.38%. The fall in Kotak, ICICI, AXIS were quite strong in that period - is it telling us something? Yesterday also we decided to go with a neutral stance, today we are sticking by that again. Despite the gap-up today we were not able to break through the 44650 zone i.e. above the double top level. For bullish momentum to pick up, the only thing BN has to do is negate the double-top zone. If we are falling, the level to watch out for is 44068.
NSE:BANKNIFTY
by viswaram
16th Oct ’23 - M pattern overlooking W pattern - BN PostMortemBankNifty Analysis BankNifty’s trade today looked quite different from Nifty50. The opening candle was a stronger red and we retested the 44068 support. Since we did not break it - my short call did not trigger. The rejection took BN higher by 312pts ~ 0.71% and we went into the green territory for a brief period. And even after all these - the options data was absolutely lackluster. Absolutely no premiums - the best trade again was to wait it out. We all knew HDFC Bank would come with its results today - still, the volatility was not really there. Recommend you to read this tweet by Deepak Shenoy wherein he has compared the results pre and post-merger. Most retail traders may be blinded to believing there was a 50% rise in Net Profits. The reality is quite different. On the 1hr TF we have a double top overlooking a newly formed double bottom (just below support). Although the W shape is not that beautiful - the lack of ability to break the support puts its weight behind it. Today also we had a reversal from support. I still prefer to go with a neutral stance till we get more clarity. 100% sure that HDFCBK’s results will skew the price action tomorrow - I still prefer to wait for the dust to settle.
NSE:BANKNIFTY
by viswaram
13th Oct ’23 - HDFCBK results may mess up Tech Analysis -BankN50BankNifty Analysis BankNifty was crazier than Nifty today, but because the options premium were not juicy enough, I refrained from taking positions (glad that I did). Open we fell 349pts and never really recovered from it. Till 13.30 BankNifty was showing more intent to fall than Nifty. Then came a quick surge of 248pts ~ 0.56% in 30mts. We closed the gap with this. More importantly, we fell back 360pts from that day’s top. A 0.81% fall in the closing hour has to do something with the results on HDFCBK. Yesterday I went with a neutral view for BankNifty and clearly said would prefer to go bearish if the 44380 level is broken. 44380 from the chart above shows the minor support level on which the double top lands. For Monday, it looks like the technical analysis may not work as news-flow, the results declaration on HDFCBK will mess it up. Still, with respect to the support/resistance levels, I wish to go with a short position if the 44068 gets broken.
NSE:BANKNIFTYShort
by viswaram
12th Oct ’23 - BN hides the NiftyIT fall today - PostMortem BankNifty Analysis Banknifty also had a perfect flat day today. Since we did not have an attempt to fall, I assume the bulls have a slight advantage over the bears. Its inability to take out the 44738 resistance was also quite worrying. But there was something strange and heroic by BN today. NiftyIT was falling pretty sharply today on the back of results from TCS. INFY also started falling even though the results came after market hours. NiftyIT fell 1.67% today but had a total swing range of 2% today. The major reason why it was not reflecting on Nifty50 was due to BankNifty’s counter-performance along with RELIANCE & ITC. Will try to write an article this weekend on why NiftyIT should have Futures & Options enabled and an independent expiry day. The only volatile index out there is IT and since we have a VIX collapse the option sellers are making only peanuts these days (me included). NiftyIT if enabled for FnO will have attractive premiums as it is quite expected to move 1.5 to 2% intraday. On the 1hr chart, BN shows a sideways pattern. I wish to continue my neutral stance till the resistance of 44738 is taken out. And wish to change to bearish if we break the 44380 levels. After the market closed we got the CPI inflation data and it came at 5.02% - source. This should give a positive boost for tomorrow. Also, the US CPI came at 3.7% - source - but as it stands SPX is trading flat.
NSE:BANKNIFTY
by viswaram
11th Oct ’23 - BankNifty is still neutral, Nifty has broken outBankNifty Weekly Expiry Between the last expiry and today, BankNifty has gained 525pts ~ 1.2%. The fall on 9th October was nicely covered up by the price actions on 10th and 11th. This is the 2nd time BankNifty has recovered after falling below 44068, the bulls are still strong. BankNifty Today Analysis There were many things different about the expiry today. We went in with very low options premium. So when we opened gap-up of 180pts the option mispricing was very much evident. It took a while for the CE options to start surging - most interestingly the OTM call options went on to make day’s high after BankNifty started cooling off from the day’s high. Few of the OTMs surged above 120% - quite unbelievable. If I draw an orange line from the recent double-top formation - it ends up right at today’s intraday high. The inability to break this interim top will become a problem for BankNifty bulls. Nifty on the other hand managed to cut through the resistance, BankNifty is still undecided. This is the main reason I went with a neutral stance yesterday, even though we ended the day with 0.35% gains - the bulls are not strong yet. For tomorrow I wish to go long only if BankNifty manages to take out the 44712 interim resistance in the opening hour. Ideally, it should be able to do it as HDFC Bank was looking quite dangerous in the afternoon session. These days NiftyIT has more fluctuation and volatility than BankNifty making it an interesting candidate for FnO - Still not sure why NSE has not considered it.
NSE:BANKNIFTY
by viswaram
10th Oct ’23 - Leader in trend changes - BankNifty PostMortemBankNifty Analysis The real reason for the rally on Nifty was BankNifty. Remember yesterday we discussed how it fell below the support of 44068 and then had an intraday rejection. We also went with a bearish view for today. The first thing the gap-up and the swing of 1st candle did was to breach the resistance. A +268pts ~ 0.61% open was more than adequate. Then till 11.55 - BankNifty was spiceless - no intent to move in either way. Then from 12.00 to 13.40 - we had pure magic. A rally of 407pts ~ 0.92% to break away from the support in style. We also came pretty close to taking out the swing high of 6th October - but the last 2 hours saw some profit-taking. BankNifty at its best - the options premium also started swinging in a wider range expecting more firepower. On the 1hr candle, we are out of bearishness but I am not bullish yet. Yes, today’s price action gives it a lot of momentum - but we need to retest the 44628 to 44731 levels and break it for bullish momentum to spike. I wish to change my stance from bearish to neutral till we get more clarity. Since we have the weekly expiry tomorrow - I hope the options premium will jump just like we did today, otherwise the options selling will not bring good bang for the buck.
NSE:BANKNIFTY
by viswaram
9th Oct ’23 - War news breaks support of BankNifty PostMortem BankNifty Analysis On Friday I changed my stance from bearish to neutral since we had a strong performance. We pushed through the 44068 resistance and maintained those levels. But today we dropped below that and even closed lower. Notice we took out the 44068 level in the opening 5mts candle itself. From there we hit a new swing low of 43796 and then recovered all the way up to 44068 before falling again. Sometimes the best technical indicator that is available is the support/resistance line. If BankNifty was really having good bullish strength - it would have cut through the resistance. A fall really shows weakness. On the 1hr TF BankNifty came from a double top formation and then made an isolated down day. Followed by 2 isolated up-days. Today we have another isolated down day that tested a new swing low. 43755 and 43603 levels are beneath - but not sure if we could stop there if the fall is mainly due to global macros. Since we have broken the support today, my stance will be bearish for tomorrow. Just think - why are the banks falling? No way they would have sanctioned loans to the firms in Israel right? My wildest guess is that there could be many firms that have strong business relationships with Israel, and those companies may have a higher debt:equity ratio. I am quite sure the details of exposure will come out within the next week. Are the risks evenly balanced - I guess not.
NSE:BANKNIFTYShort
by viswaram
1
6th Oct ’23 - RBI meeting status quo - PostMortem BankNiftyBankNifty Analysis I had a bearish view for today, but it played out as a bad day for the bears. The RBI MPC meeting at 10 am did not move the needle that much. Usually, the RBI Governor’s speech drives up the volatility and we have some adverse moves. There was one strong move of 250pt from 10.50 to 11.20 where we pulled back from 44500 levels. Even then the options data did not get excited - and we knew that the fall was not going to last. Rightly so, Banknifty recovered quite decently and ended the day with good gains. Let us look at some points discussed by RBI Governer today - source Keep the repo rate unchanged at 6.5% Continuing the withdrawal of accommodative stance GDP growth is projected at 6.5% Inflation is projected at 5.4% The US Fed rate is 5.5% and ours is still at 6.5%, keeping the rates lower is not good for a country that needs to attract foreign investments. Although he started talking about the USDINR - that conversation did not last long. If the US decides to hold these rates for a longer tenure - a major chunk of emerging market investors could flee back and invest in dollars. An accommodative stance is usually provided to stimulate growth in the economy. RBI is just withdrawing the accommodation. Its fight is not removing liquidity with full intensity, as it may impact growth. If removing liquidity was a top priority - the stance should have been more hawkish. GDP growth at 6.5% is very good - no comments on this. Inflation at 5.4% is still bad. In his speech, he said he is very particular that inflation returns to the 4% band and then he forecasted the next FY inflation around 5.2%. By Shaving off 0.2% a year - how long will it take to reach back at 4%? He also said about removing liquidity by selling Government Bonds - I am not sure how that will work. Will have to burn my midnight oil to dig deeper into it. I am changing my stance from bearish to neutral as we have managed to break the 44068 resistance. Today’s price action imparts some stability to the current levels. The next levels to watch for will be 44702 if we are going up and 44136 if we are falling.
NSE:BANKNIFTY
by viswaram
5th Oct ’23 - Bearish despite gap-up - PostMortem BankNiftyBankNifty Analysis BankNifty had a similar chart pattern as that of Nifty. An opening gap-up of 272pts ~ 0.6% and then a 2nd leg of rally from 10.30 of 279pts ~ 0.63%. The only difference I saw was that after the day’s high was hit - BankNifty started falling gradually whereas Nifty went flat. Tomorrow’s RBI MPC outcome at 10.00 might be interesting. We would like to see how RBI governor is planning to suck the liquidity out. The I-CRR implementation and then its withdrawal created a ruckus last time. Markets fell first and then recovered equally. If the liquidity is left unchecked - the costs of goods & services will keep getting inflated. Unlike other developed countries - we do not want to hurt the growth and the growth in inflation is not hurting us that badly. I do not wish to change my bearish stance on BankNifty despite an up day today. The M pattern at 44650 levels are looking quite strong for me and until BankNifty takes them out - I do not even plan to go neutral as well. The biggest enemy of the bears is the implied volatility - the options premiums are not expecting a massive move this week even though we have an RBI event. Option sellers are having a tough time these days - I still think it's much better not to trade than sell strikes cheaply.
NSE:BANKNIFTYShort
by viswaram
4th Oct ’23 - HDFC spoils the expiry today- BankNifty PostMortemBankNifty Weekly Analysis Between the last expiry and today, BankNifty has only fallen 291pts. That fall coincides with a strong support level break - which may bring in additional pain for the long-only traders. It is also significant that BankNifty broke the crucial level ahead of Nifty reiterating its position as a leading indicator. BankNifty Today’s Analysis I was pretty much disappointed today with the BankNifty’s expiry. Not because I couldnt make any money out of it, but because the premiums were all good for nothing. Even after a 450+ points fall in the opening 10mts - the implied volatility did not move an inch. Usually OTM premiums spike when BankNifty moves above 1% - but today there was absolutely nothing. 900 points lower strike 43000 PE was trading at Rs2 in the morning session. These are the premiums of strikes we see for 2000 to 2500 pts away from ATM. Most interestingly when BN was at 43880 levels by 12.30, 43500 PE was trading for Rs2.6. There is a solid reason why this happened and I will explain it in detail. HDFC Bank is the main culprit. It went up 2.53% between open and 10.30. If you look at the daily candle - HDFC shows bearishness. Two strong double tops and then a lower high formation. The true free float weightage is 40.9% - source. Which means a small trigger could change the game. Ideally, we should have had a strong down day. BankNify ended the day with cuts of 435pts ~ 0.98% - but due to the optimism on HDFCBK, the options premium were pricing in the information that further downside may be limited. The news broke today “HDFC Bank Q2 Update: Advances up 58% YoY, deposits rise 30%”. On the 1hr TF we have broken the support of 44068, yesterday’s bearish call worked out well despite the misadventure from HDFC. I would like to see if BN can cross this resistance level in the forenoon session. I still maintain the bearish stance with the next target being 43827 and then 43732.
NSE:BANKNIFTYShort
by viswaram