Postmortem on Bank Nifty - 09 SEP 2022 - and Weekly Analysis

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.

TradingView Chart

Volumes in CE options. 45000 CE itself traded 48.56 lakh qty shows the intensity of speculation

v

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.

TradingView Chart

1hr chart also shows strong uptrend.

TradingView Chart

Daily chart shows no sign of stopping, notice the slope of the rally marked in yellow. Its not a healthy 45 degree, its much higher say 60 to 65 degree. This shows either strong market momentum or heavy one sided speculation for trapping the retail traders.

TradingView Chart

On a weekly timeframe the bank nifty is trying to reach for the top end of the rising channel (10+ year channel)

TradingView Chart

Bank nifty important support and resistance lines
s1: 40149, s2: 39738
r1: no resistance line because BN near ATH


Comments