Bank nifty was in a stable range today, much different from the fireworks we have seen last 3 trading sessions. BN opened at 39422 and closed at 39375, the intraday high of 39595 and low of 39200.
The first 5 minute candle was interesting, opened gap up and rallied close to 172 pts and then gave it away. This opening trade nearly shot up the CE options premium multifold. Traders who had kept cool could have minted money by shorting CEs today, however knowing what this beast (banknifty) is capable off - most of them would have let the opportunity pass by.
So today's trade can be thought of as a consolidation & non directional. We may have to wait for further triggers to go upside, whereas small negative news can break the support levels. This is because BN is trading near all time highs.
5mts chart for the previous days viewed together doesnt show any signs of reversal. BN is well above the support line and quite near the swing high.
The 1hr chart shows upside momentum, any signs of reversal has to break the recent swing low near 37900.
Daily chart shows upside, for a trend reversal the BN has to break down the upper falling channel (green line) approx at 35680 level. Which seems very far for now.
Weekly chart shows continuation in upside momentum or consolidation at these levels esp when the majority of the last 7 candles were in green & with strong momentum.
The global outlook (macros) & fundamentals are not looking strong. Its quite difficult for the Indian stock markets to decouple from global trend and outperform. The major issue is that when the Indian markets start reacting, the fall will be harsher & may wipeout many traders & investors.
Bank nifty important support and resistance lines
s1: 39330, s2: 38699
r1: 40149
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