The day began with an arbitrage - SGXNifty value = 16957 | Nifty50 preopen value = 17100. There was close to .09% money making opportunity translating to Rs7250 per lot of nifty futures traded.
SPX ended friday's trading with a 1.51% fall, NDQ - 1.73% - so its quite normal that we expected India indices to begin low and fall further. But what really happened with bank nifty was not an outright dip or fall.
BN opened gap down at 38444 and then rallied up to fill the gap and then fell back to where it opened - so i assume this trade is resultant of quick square off of overnight positions.
The trades from 09.50 to 10.15 showed some downside momentum but it was not powerful enough. BN traded in a small range from 10.20 to 14.20 - the options premium is indicative of this low IV.
Usually when the India VIX shoots up 7 to 9% the IVs in the bank nifty also rises equivalently, but what i saw today was the realized volatility would have been very low during the 10.20 to 14.20 period. If we look at the 15mts chart it will depict it more accurately
15mts chart
The final hour saw quite volatility but the option prices still stayed in the safe range - there was no unusual breakaway from the day high. Also BN held quite steady with the next support level of 37946.
5mts TF shows either a consolidation pattern or the formation of a new lower high
1hr TF also shows a possible lower high formation - but its too early to tell
Bank nifty important support and resistance lines
s1: 37946, s2: 37247
r1: 38698, r2: 39326
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