Bank nifty opened 41533 gap up today, made an intraday high in the 3rd candle and then fell to the support line at 41312. Most importantly this support line proved to be quite a fight with swings up and down - and final close at 41208.
The opening swing would have taken out most of them by surprise, few of the weak CE writers would have squared off thinking the rally will continue. And what followed from 9.25 to 13.00 was real sanity. Eventhough the day ended negative - the temptation of BN was move up - the trigger to break through the resistances at 11.35, 13.05 & 14.20 shows that. The final closing hour may be attributed to profit taking due to weekly expiry or the positions taken anticipating global macros.
The CE option premium shot up on multiple occasions even when BN was not making new highs - this could be result of intense shorting or spike in implied volatility. After all its the bank nifty we know and its supposed to be high beta.
Indian stock markets cannot remain decoupled with global markets unless for any govt., economic, political triggers. Bank nifty & nifty are technically out from the bear market rally and according to some analysts it may be a new bull run. I personally think technically BN may be bullish but the fundamentals are not agreeing to the new highs set. The S&P500, Nasdaq100 are all still in bear phase. If the global markets are falling, ours will follow suit soon.
5mts chart when viewed together for previous days - does not indicate a reversal yet
1hr time frame still shows bullishness
Bank nifty important support and resistance lines
s1:40689, s2: 40142
r1: 41312
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