The rally that had to come yesterday, came in today. Remember i had a bullish call for 14th Nov — but it didnt work out — read here
Bank nifty opened at 42234 right at the swing high of yesterday's session negating the price action from 14.10 to close yesterday. The first 3 candles showed bearishness and a small indication that we may follow the same action as last 1hr of yesterday.
But the selling momentum was not fierce — infact we closed the gap at 12.15 and what followed was a strong setup for an intraday rally. From 12.20 to 12.50 there was a short spike to reach the opening level — then a small consolidation till 13.55.
And what followed from 14.00 to close was a powerful breakout rally — all falling in expectations from the 1hr, 1D, 1W chart pattern. We have a new all time highs for bank nifty & nifty50 today. Nifty50 performed even when the niftyIT index was underperforming.
Note — these rallies were even after we had a negative closing in US yesterday.
Of the bank nifty components
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HDFC Bank fell in the early half of the day, at 12.20 in 3 candles it went positive and then held a narrow range till breaking out again nearing close.
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ICICI Bank opened positive made a surge till 10.05, consolidated and then rallied strongly from 13.55 to close
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SBIN also started positive, went higher and then almost dame back to the 590 level and then had a strong rally from 12.20 to close.
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AXIS was trading underwater till 14.20 and then participated in the last 1 hr rally.
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Kotak Bank was trading negatively for most of the day, only in the last 1 hr it reduced its losses.
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Indus Ind opened strong, fell to the yesterday's closing level and then traded flat, it too participated in the last 1 hr rally and ended the day positive.
There was a strong intraday rally today, a simple debit spread would have resulted in good profits today. Even a credit ratio spread would have worked out superbly based on the timing.
What i did was shorted 1 lot of 42700 CE and bought 2 lots of 42900 at 09.48 and followed it up with naked shorting of far OTM CE once the premiums started moving up.
Once the time decay started kicking in in the last 30mts the far OTM premiums fell and gave a decent return. On top of that the ratio spread was squared off with a no loss no profit. This ratio spread also acted as hedge against the naked shorts.
Just when we thought the SPX and Bank nifty was converging, the rally today has further widened the spread. If US markets fall today then the gap will continue to diverge.
SPX reacted pretty strongly with the 3991 resistance and then had 2 bearish hourly candles. The support at 3945 was not taken out either.
DAX — german market has rallied quite strongly from the near term bottom — if its a breakout or higher low only time will tell.
EU50 also has made a decent recovery from the Sep lows.
15mts and 1hr chart pattern are showing bullish signs. Most of the traders and speculators would have seen these patterns and would be ready with their positions — long !
If there is a small hiccup or bad news we can see the long unwinding and a quick fall to the support levels of 41929 & 41618 soon.
Bank nifty support and resistance has been updated
new support1: 41929, support2: 41618
resistance: no resistance as at ATH
PS: Read the standard disclaimer at: https://bit.ly/3Nm3RER
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