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20th Dec ’23 - BankNifty falls 967pts - stance is now bearish 🐻BankNifty Today Analysis It all started with BankNifty today, the options flow was indicating immense bearishness. But Nifty50 options flow was showing strong bullishness. This contrasting directional bias barely works in our market. And 9 times out of 10, Nifty50 mends its way to go as per BankNifty’s directional bias. The reason is, BankNifty is still the leader of the pack. 4mts chart link - click here So first, the collusion again with NiftyIT to get Nifty50 to get to a new top and then a meltdown. BankNifty shaved off 967pts intraday after getting a gap up open. The candle at 13.27 ensured we were re-entering the ascending channel. Just like we discussed yesterday - the directional move came and we were not caught off guard. You might have guessed when we went short today, yes as soon as the ascending channel top line was breached. The ensuing momentum gave us confidence in the bearish bets. What was more surprising was the breach of the bottom line of the ascending channel - I honestly did not see that coming. 63mts chart link - click here Technically Banknifty has not moved that much today, we just dropped 0.89% compared to 1.41% of Nifty50. There were some outliers today, ADANIENT -5.35%, ADANIPORTS -5.76%, RELIANCE -1.21%, LT -2.3%. And the subsectors were all in RED. I seriously do not know if it is a serious correction phase as the runup so far has been like a dream. The chances of something happening like this were quite evident today. BankNifty options premiums were screaming bearishness - I thought it was because of the expiry. And Nifty50 was showing strong bullishness. I bet my money on Nifty as the options prices were more rational as it was not expiry related. But since the BankNifty’s premium’s were not dropping - It gave me the warning shot. Quite fortunately was able to catch the top and low of a few strikes correctly. Also was able to switch between BN and N50 strikes quite seamlessly to take advantage of the mispricings. Who in the world will believe 22700 CE of Nifty50 had a premium of Rs3 for 1 DTE i.e. a strike 1500pts above spot?
NSE:BANKNIFTYShort
by viswaram
21 Sep ’23 Post Mortem on BankNifty - will 44429 get broken ?BankNifty Analysis One thing that really gave me confidence in the bearish move was the build up of momentum in banknifty. I did not get this feedback from Nifty, but Banknifty’s pulse gave me hope that further down moves are highly possible. Since I rely on options flow also to gauge the sentiment - the intensity of CE shorts were too good today especially in the last 1 hour of trade. Nifty had a flattish day after the 1st hourly candle - but take a look at banknifty. The 3rd candle onwards everything was in RED. 567pts out of 760 came in this period - and the rest points actually came in gap-down. When the market falls in normal trading hours - it gives a boost of confidence vs fall via gap-downs. That is because traders prefer to see the sentiment changing hands. For tomorrow I am continuing the bearish stance with the first target being 44429 and then 44236. If 44068 gets taken out in next 2 sessions - it is going to be a game changer
NSE:BANKNIFTYShort
by viswaram
2
11 Jul '23 Post Mortem on Nifty + Long call continues...Today we had a perfect inverted V formation. The high of the day at exact 12.00 noon. A rally of 82pts from opening level and then a fall of 66pts. Even though nifty fell today, it was showing so much of positive energy and a general reluctance to fall. We will bring up the comparison with banknifty shortly & it will make sense. Today's peak formation ensured we are getting a double top at the ATH levels ~ 19508. The profit booking may be attributed to that. If we continue to fall in the coming days - its better to change the bias from long to neutral. --- Trades Taken Yesterday I had reversed my short position to long position & had carried the 19400/19300 PE bullish credit spread overnight. Luckily it worked out alright today. By 10.43 I exited at a price of 29.6/12.9. I exited because more than 50% of premiums had decayed & not because I was bearish. At the same time I entered into 19400/19300 PE bullish credit spread of the 20th July series for a price of 74.7/48.4. We then had the classic reversal, almost back to the open levels. Somehow I felt the risk:reward was not matching & then exited the new position at a loss by 14.46 @ 79.7/49.4 and got back to the 19400/19300 PE spread in the 13th Jul series for 32.7/12.3. The 15.00 candle really scared me and if you calculate the risk:reward was 3980:1020. So I exited the credit spread & went ahead with the call debit spread of 19300/19400 CE @ 176.15/95.15 by 15.03. The rationale being 19300 was still in the money & might offer some cushion as expiry is in 2 days. Whereas 19400 PE could go in the money if the move is 50pts or more.
NSE:NIFTYLong
by viswaram