Surprising price action by bank nifty today, especially the last 40mts when the bounce from the support took it to the HOD.
The preopen rates today was not indicating any hint of green, still bank nifty hit the resistance in the 4th candle after the gap down open. The first candle it fell to the support level of 39742 & the bounce was good enough!
39742 comes to the rescue again, but today's support is quite something special. NiftyIT and Nifty50 were bleeding today. IT was almost 2.7% down by 10.15, Nifty was down almost 1% — same time Banknifty was only 0.12% lower.
By 11.15 bank nifty had hit the resistance again, this time a strong hourly green candle. If we split down in the 5mts TF we had 3 amazing swings today.
The second swing of 1.09% ~ 432pts from 10.15 to 11.50 and then a final 40mts rally of 0.56% ~ 223pts that ensured bank nifty is closing with an overall gains of 1% whereas nifty50 was still down 0.42% & CNXIT down 1.95%.
I really dont know what made banknifty outperform the other 2 index today — not remembering reading any change in fundamentals or news events for this surge.
If we look at the 15mts TF we can see a minor breakout from a 5 day 4 hour session. If we need further bullish momentum we should see tomorrow's trading zone to be well above this range depicted.
If we fall back to the range-zone, what just happened today will turn out to be another fake move.
1hr TF almost showing a W like pattern (double bottom) right at the support zone. For this pattern to play out as per the text book, further trade has to happen above 40400 levels.
Failure to take out the next resistance will look very promising for the bears as they still have the upper hand till 41600 levels.
We had a similar W like pattern on 30th Jan — 02 Feb period — but that did not playout mainly because bank nifty was unable to breakout.
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