Bank nifty opened gap up at 40520, note this gap up is above the topmost support line at 40149. There is no resistance level and as per technical analysts the least friction for the market is to move up. The opening 75mts of trade was much similar to that theory, at a point in time i thought the bank nifty was unstoppable.
However the trades from 10.40 to 13.20 made sense, few of the traders & speculators did take the profit out of the rally. Which is a good sign, mainly because it will give strength for further direction. BN never tested the support line today nor closed the gap - which is a sign of strength.
I am also bit skeptical to take trades at this point because of no known resistance levels and further moves may be fast and furious. I also noticed the shorts taken on the call options, the volume indicating a heavy speculation that market may not rise further.
Volumes in CE options. 45000 CE itself traded 48.56 lakh qty shows the intensity of speculation
Volumes in PE options, 29000 PE traded 30.79 lakh qty - this is for a strike that is 11300 points below ie 27% lower.
5mts chart when viewed together for the last few days shows no signs of reversal or top formation.
1hr chart also shows strong uptrend.
On a weekly timeframe the bank nifty is trying to reach for the top end of the rising channel (10+ year channel)
Bank nifty important support and resistance lines
s1: 40149, s2: 39738
r1: no resistance line because BN near ATH
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