I had given a long call on Friday, 11th Nov looking at the intraday chart pattern. It turned out wrong & would have been a disappointment to those who follow my analysis.
Bank nifty opened at 42177 in line with the chart pattern as of 11th Nov and did not really go anywhere. BN traded in a small range with a minor negative bias. This bias would be result of the mega gap up which we saw last session — may be BN catching the breath.
The move from 13.00 to 14.10 was something i was expecting earlier in the day — but this move also did not sustain and the final closing was right at the top of 13.00 candle close.
The only bullish tone from today's price action is that BN did not breach the support level of 41929. And since this is ATH maybe the support line itself is shallow — may be it should have been the 41995 level. Lets observe the next 2 sessions and make the necessary changes.
Of the bank nifty components:-
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HDFC Bank opened strong and then gave away gains and was trading in negative territory — remember the 13.00 move discussed earlier — this was mainly because of the move in HDFC. May be there was further news impact or some event expected this week.
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ICICI bank traded weak, fell till 10.30 sharply and then traded in the narrow range
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SBIN opened up, went down in the 1st candle itself — crawled back the previous close level and then steadily declined to close the day lower.
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AXIS Bank traded most of the day in the negative territory but managed to close flattish
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Kotak & Indus Ind had strong upmoves and they sustained. Both of them closed in bullish tone.
Today the option prices both at CE and PE side gave lot of opportunities. The initial & gradual fall in BN prices had made the far OTM premiums surging up — it was good opportunity to short sell them.
The far OTM PE did not participate volume wise till we got the price action from 13.00 to close. Here again we could have shorted the far OTMs for a small premium mis pricings.
2 ratio spreads worked perfectly.
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short 1 lot 42500 for 114.7, buy 2 lots of 42700 for 70.15 at 09.38 and then cover it by 13.33
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short 1 lot of 41500 for 45.7, but 2 lots of 41400 for 35.6 at 13.55 and then close it by 14.49
The rationale being to take advantage of the directional move today. Ratio spreads are the best wealth creating tool there is.
SPX vs Bank nifty — the spread is narrowing as S&P500 has done lot of catch up in the last 3 sessions. Banknifty looks pretty tired as of now and may trade flattish till we get some events or news.
I can think of the mother and son climbing up the hill, the son runs ahead and climbs first and then waits for the mother to ask what to do next.
Indian index is the son and the SPX is the mother — until SPX climbs the peak — we may not have further triggers. Or else the son will have to climb down to meet the mother half way down to know whats next.
Friday's closing was above the resistance line of 3991.18. The new resistance level is now 4072.38, the support below at 3945.89
15mts is showing a range based move vs an upmove on the 1hr TF
Bank nifty support and resistance has been updated
S1: 41929, S2: 41618
resistance: no resistance as at ATH
PS: Read the standard disclaimer at: https://bit.ly/3Nm3RER
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