The handout from US markets were very weak, S&P500 falling 4.3% overnight. And as expected bank nifty was supposed to start gap down and further break down.
Contrary to the expectations, this is what happened - BN opened gap down 565pts at 40308 and made a mega rally to close at all time highs. Within the first 30mts itself BN closed the gap took a minor pause and then started rallying again - finally taking out the last of the recognized resistance line at 41312. From 12.35 to 13.55 the trading was near this resistance level and then a breakout at 14.00 towards 41600 and then a final close at 41373 near the support line.
Today would have been the craziest day ever for bank nifty in the last 1 year. The expectation was that BN will more or less mirror the global macros - but it didnt. I can tell with 100% certainty that none of the options trader would have planned for the move today. Those who were long CE would have booked their losses in the first 15mts and those who were short CE would have anticipated higher MTM before getting stopped out due to reversal.
Those who had shorted PE would have squared off in panic and those long PE would have ended up in huge losses.
The only safest trade that was possible today would have been to short the OTM put options that stood its ground, finally closing in red.
Just see the intraday highs set by the OTM put options today.
5mts chart viewed together for last few days shows bullishness
So does the 1hr chart
Bank nifty important support and resistance lines
s1:41312, s2: 40149
r1: no resistance line because BN near ATH
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