BankNifty & Nifty50 Today — 26 JUN 2023 Post-Mortem Analysis
None of the major indices were that volatile yesterday. After the weekend news/events from Russia — we were hoping to have some wild swings today. Quite opposite to the expectation, all the 3 major indices — Nifty50, BankNifty and NiftyIT was relatively stable & closed flat today.
BankNifty
BN opened gap up, but right at the opening itself we all anticipated that we are not going to have an up day today. The options flow gave me a bearish bias and was looking for opportunities to enter.
The first swing till 10.50 where we had a drop of 222pts & then a retracement of 113pts looked healthy and almost filling all the checklist for the 2nd leg.
Instead of making a lower low — the 2nd leg made an upmove to take out the retracement high. By this time the options premium was dead — indicating no more uncertainty ahead.
SBIN & ICICIBANK gave ample support to BN today & prevented it from falling. Again the conviction of the bulls were quite strong.
Between 15.00 to 15.05 BN made a quick surge of 105pts and then quickly lost it between 15.10 to 15.15 — might have taken out the stop losses of few option traders today. The way in which PE options reacted made me think the major participants would want BN to go up.
1hr TF
The double bottom W pattern that formed with the bottom at 43404 is still intact. The upmove from 20th Jun to 22nd Jun was pretty weak that did not allow it to go past the resistance zone of 44068.
For further clarity we need a break of either of the support or resistance zone — as it stands the momentum looks like fading. The options premium is also reflecting the lack of directional trend.
Nifty50
N50 also had very little movement today to fire up the options premium. We even have a 10000 PE for the current week expiry. i.e a strike which is 47% below the spot price. Even a nuclear war will not take us there by Thursday.
N50 also maintained the ground today, not falling below the 18650 level ensuring the swing low of 23rd is not broken. When we ended the last session — the sentiment was looking weak. I almost thought we will break the support level today — such was the CE shorting intensity on last Friday.
Since we had no continuation of carried forward momentum — I am assuming that most of the positional traders would have booked profits & exited the short CE trades.
1hr TF
N50 has formed a rounded double top M like pattern near the ATH zone. The fall from 22nd got some follow through on 23rd but today’s move was not supporting.
For the M pattern to work perfectly we would require a break down from the support level of 18597.
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