From the 4th of May till 11th, banknifty has fallen 0.3% ~ 131pts. Headline does not really indicate what went behind.
We fell 1028pts in 1 single day i.e. 5th and then scaled back 870pts in the remaining 4 days. How can I not credit the bulls? You might be bored with me praising the bulls everytime — sadly that is the reality. The bears are really unable to move the needle, this week I seriously thought we will take out the 42576 session — but that did not happen!
Today's Analysis
Would you believe the gap-up open of 43535 today? We hit the same level as of 04 May on which banknifty had made an interim top. Needless to say the 5th May selling on HDFC-HDFCBK news took out some gains, but we have bounced back quite strongly.
That gapup stands as an anomaly, otherwise the price action is perfect, showing a higher-high formation. And then we had a flattish session afterwards.
From an expiry standpoint we did not have big movements (unusual), but we had 2 or 3 intense volatility surges even with a flattish movement (again unusual). The IV surge helped the options premium spike 2 or 3 times giving excellent opportunity to traders today.
Example 42000 PE which was OTM by 1500pts ~ 3.4% away from strike had 2 swings. 1st one from 09.30 to 10.30 where its premium surged 99% and then 13.10 to 13.48 where it surged 67%. Did the market make any abrupt move during that time — absolutely not.
15mts are still having a minor bullish tone, but it will quickly fade out if new highs are not made. Are the bulls tired after a long run — seems like that. Nearest support is still 43253.
1hr is more bullish than 15mts TF thats because the trailing price action shows strong upwards momentum. It also has a vulnerability to form a double top at 43750 levels — but for that we need some bad news. The only bad news we can expect in May is the Karnataka elections results!
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