PostMortem on BankNifty Today & Analysis of 26 DEC 2022
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Bank Nifty Today - 26 DEC 2022 Post Mortem & Analysis
Quite an unexpected turn of events. On 23rd Dec we thought there could be a slight option for a short covering rally - read here - but i never thought the short covering will turn into a bear rally breaker.
2.31% intraday rally on a weak market - quite impossible to comprehend. BN started the day at the support level and in the 15mts it hit the resistance. By 09.35 we had a breakout from 1st resistance level.
That rally did not stop there. There was no selling into and by 14.30 we had the 2nd resistance of 42573 being taken out. There was again momentum to the 3rd resistance level of 42888 - but the rally lost steam, in fact the closing minutes we saw a fall back to the now support level of 42573.
So what do i make out from today's rally - absolutely nothing. Its because the entire global markets are on holiday today. And we had a free hand to play. The mother was not watching and the child had the freedom to do anything. SPX is the mother market and Nifty50 is the child here.
The options volume was very low today, remember we said 49500 CE was traded for 49+ lakhs qty on 23rd, it was only traded for 16 lakhs today. Well the ITM options volume was almost double.
Also the closing minutes far OTM PE premiums also spiked indicating a put writing. So if the trend continues tomorrow and wednesday then we can say its a valid one, till proven i would like to call this a fake move.
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Of the bank nifty components:
There is only anomaly today - the chart of Kotak bank. Every other bank had a similar chart pattern showing a generic trend of long build up or short covering. Whereas Kotak was taking the beating today. Kotak ended in red.
Might be it has something to do with the 1800 support/resistance level which is proving to be of great importance last 3 years or so.
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15mts & 1hr TF - today's move has broke the continuity of the chart. Should we ignore it? We can only do so after monitoring the next 2 days.
Is it a downtrend - cannot say when 2 resistance got broken in the same day. Is it an uptrend? - cannot say until the volume matches.
Bank Nifty Today - 26 DEC 2022 Post Mortem & Analysis
Quite an unexpected turn of events. On 23rd Dec we thought there could be a slight option for a short covering rally - read here - but i never thought the short covering will turn into a bear rally breaker.
2.31% intraday rally on a weak market - quite impossible to comprehend. BN started the day at the support level and in the 15mts it hit the resistance. By 09.35 we had a breakout from 1st resistance level.
That rally did not stop there. There was no selling into and by 14.30 we had the 2nd resistance of 42573 being taken out. There was again momentum to the 3rd resistance level of 42888 - but the rally lost steam, in fact the closing minutes we saw a fall back to the now support level of 42573.
So what do i make out from today's rally - absolutely nothing. Its because the entire global markets are on holiday today. And we had a free hand to play. The mother was not watching and the child had the freedom to do anything. SPX is the mother market and Nifty50 is the child here.
The options volume was very low today, remember we said 49500 CE was traded for 49+ lakhs qty on 23rd, it was only traded for 16 lakhs today. Well the ITM options volume was almost double.
Also the closing minutes far OTM PE premiums also spiked indicating a put writing. So if the trend continues tomorrow and wednesday then we can say its a valid one, till proven i would like to call this a fake move.
---
Of the bank nifty components:
There is only anomaly today - the chart of Kotak bank. Every other bank had a similar chart pattern showing a generic trend of long build up or short covering. Whereas Kotak was taking the beating today. Kotak ended in red.
Might be it has something to do with the 1800 support/resistance level which is proving to be of great importance last 3 years or so.
---
15mts & 1hr TF - today's move has broke the continuity of the chart. Should we ignore it? We can only do so after monitoring the next 2 days.
Is it a downtrend - cannot say when 2 resistance got broken in the same day. Is it an uptrend? - cannot say until the volume matches.
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