13 Jul ’23 Post Mortem on Nifty & BankNifty + Weekly Analysis + Expiry
Nifty Weekly Analysis
Between the last expiry & today, Nifty50 is actually down 40pts ~ 0.21%. That seems quite hard to believe especially when we had an ATH break today right?
The fact is N50 broke out from the 19500 levels today & that would have created the perception that nifty had a gaining week. Also on 7th July we had a red day and almost touched the 19300 levels. So credit goes to N50 since it recovered all its losses & hit a new ATH of 19567 today!
Nifty Daily Analysis
We had 2 strong moves today
- A gap up open and then a race to take out the ATH, a total swing of 182pts ~ 0.94%
- A similar fall of 180pts ~ 0.92% to touch the prev. close value
Both the directional move would have given ample opportunity for options traders to mint money today.
Final close was 0.15% higher mainly supported by the NiftyIT index. The dramatic inverted U shape price action was due to RELIANCE which fell from 2799 to 2743. HDFCBK, KOTAKBK & SBIN also dragged the index.
Trades Taken
Other than the regular expiry trades, I reopened a bullish PE credit spread between 10 to 10.30 AM. 19500/19400 PE for 67.45/40.65. This was taken when Nifty was at the ATH and due to the reversal this position is currently in loss.
Will take a decision tomorrow to hold on to bullish bias or exit at a loss.
BankNifty Weekly Analysis
Banknifty on the other hand is down 1.31% ~ 592pts between the last expiry & today. This was obvious as banknifty had shown a bearish trend ever since hitting the ATH on 4th July.
Today for a brief period banknifty went above the bearish trend line but reverted to mean and closed within. It was when Nifty took out the ATH that BN reached the 45000 levels today.
I now have a bullish call for nifty and a bearish call for banknifty, unfortunately only one of them will work out!
BankNifty Daily Analysis
The initial upswing and the downswing later in the day was quite similar to the one in Nifty50. If banknifty decided to stay above the trend line the bearish bias would have ended & it would have given more confidence for further peaks.
While analyzing the options flow, I noticed huge volumes of PE credit spreads getting written i.e between 12.15 to 12.45 period. The encircled portion from the charts.
Here again it was well before the fall started, so there is every likely hood those bullish spreads would have been covered. If not there is a high likely hood that it comes into effect tomorrow & banknifty might break through.
PS: The trades taken are no recommendation, blindly following them may cause more harm than good — read full disclaimer here