PostMortem on BankNifty Today & Analysis of 28 Oct 2022
Bank nifty opened at 41236 below the resistance level of 41312 & made a real green bullish candle. A move of 206pts in the first 5mts itself. This did not last and the gain was given up by 09.50 wherein the support level was broken conclusively.
There was a test at this SR level, price action from 09.55 to 10.15 — but the selling proved quite strong. And what we witnessed today was a sharp down move — quite glad that yesterday’s short view worked.
Price action of bank nifty index in 5mts chart
The selling got arrested by 13.55 and the final 90mts showed consolidation with a minor pullback. Final close at 41034.
Today’s move was not in tandem with the global moves & macros yesterday — if it were then Nifty50 would also have fallen. Infact nifty50 ended with a gain of 0.28%
Today was the only move in the last few days where we had a real trade. The earlier days were either gap up or gap down — which indicates the actual trade is taking place outside of 9 to 3.30pm & the real money is made by institutions.
Traders were getting scared to go with overnight positions last month. Ideally SGXNifty futures should be opened for trading for retail customers — only then we can capitalize on the moves made outside of our trading hours. FIIs get undue advantage & positioning due to the macros.
5mts charts of the 6 major components — look at the opening candles of HDFC & ICICI Bank ? Sharp moves with strong volume. The negative tone was visible in ICICI, SBI, Axis. HDFCBk & IndusInd although ended in green made flat kind of pattern. Kotak made bullish intend
HDFC Bank, ICICI Bank, SBI, AXIS Bank, Kotak Bank & Indus Ind Bank respectively presented in the 5mts time frame
Few option strategies would have worked today. Since we had a trend day a debit spread ie buy near ATM PE and sell a far ATM PE would have given results. This should have been deployed after bank nifty broke the support level — aggressively at 09.50 or conservatively at 10.25.
40000 PE was trading at 80.85 at 09.59 & 39900 PE at 69.15. A debit spread would have given a max profit of 130 & 111.5 each ie. (49.15–42.35 = 6.8pts per lot.
Since debit spreads automatically handles the max loss criteria the stop loss would have been automatically taken care off.
Another strategy would have been to sell the far away OTM CE with a stop loss — but since this is unlimited risk strategy it may require expertise & risk management.
Comparison with US market shows — bank nifty up 9.39% & SPX down -13.47%
Comparison of BankNifty vs SPX (S&P500 US index)
The gap looks widening.
15mts shows sideways movement. Unless the next support is broken we cannot go further short.
15mts & 1hr TF of Bank nifty to view the broader trend
1hr doesnt shows bearish tone yet. Not unless the 40200 support level is breached.
15mts & 1hr TF of Bank nifty to view the broader trend
Bank nifty support & resistance levels
s1: 40691, s2: 40154
r1: 41312, r2: ATH
There was a test at this SR level, price action from 09.55 to 10.15 — but the selling proved quite strong. And what we witnessed today was a sharp down move — quite glad that yesterday’s short view worked.
Price action of bank nifty index in 5mts chart
The selling got arrested by 13.55 and the final 90mts showed consolidation with a minor pullback. Final close at 41034.
Today’s move was not in tandem with the global moves & macros yesterday — if it were then Nifty50 would also have fallen. Infact nifty50 ended with a gain of 0.28%
Today was the only move in the last few days where we had a real trade. The earlier days were either gap up or gap down — which indicates the actual trade is taking place outside of 9 to 3.30pm & the real money is made by institutions.
Traders were getting scared to go with overnight positions last month. Ideally SGXNifty futures should be opened for trading for retail customers — only then we can capitalize on the moves made outside of our trading hours. FIIs get undue advantage & positioning due to the macros.
5mts charts of the 6 major components — look at the opening candles of HDFC & ICICI Bank ? Sharp moves with strong volume. The negative tone was visible in ICICI, SBI, Axis. HDFCBk & IndusInd although ended in green made flat kind of pattern. Kotak made bullish intend
HDFC Bank, ICICI Bank, SBI, AXIS Bank, Kotak Bank & Indus Ind Bank respectively presented in the 5mts time frame
Few option strategies would have worked today. Since we had a trend day a debit spread ie buy near ATM PE and sell a far ATM PE would have given results. This should have been deployed after bank nifty broke the support level — aggressively at 09.50 or conservatively at 10.25.
40000 PE was trading at 80.85 at 09.59 & 39900 PE at 69.15. A debit spread would have given a max profit of 130 & 111.5 each ie. (49.15–42.35 = 6.8pts per lot.
Since debit spreads automatically handles the max loss criteria the stop loss would have been automatically taken care off.
Another strategy would have been to sell the far away OTM CE with a stop loss — but since this is unlimited risk strategy it may require expertise & risk management.
Comparison with US market shows — bank nifty up 9.39% & SPX down -13.47%
Comparison of BankNifty vs SPX (S&P500 US index)
The gap looks widening.
15mts shows sideways movement. Unless the next support is broken we cannot go further short.
15mts & 1hr TF of Bank nifty to view the broader trend
1hr doesnt shows bearish tone yet. Not unless the 40200 support level is breached.
15mts & 1hr TF of Bank nifty to view the broader trend
Bank nifty support & resistance levels
s1: 40691, s2: 40154
r1: 41312, r2: ATH
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