BankNifty & Nifty50 Today — 27 JUN 2023 Post-Mortem + Finnifty Expiry Analysis
Two major news broke out during market hours that really tipped the scale in the favor of bulls.
NSE decided to have the current weekly/monthly expiry day to 28th instead of 29th due to Bakri Id holiday shift.
HDFC-HDFCBK merger will cause HDFC shares to delist on Jul 13th
And then we had another major news after the markets closed.
NSE to reconsider the shifting of banknifty to Friday from Thursdays. Earlier NSE had planned for Friday expiries starting Jul 7th.
To start of with, I am quite unsure why we even had a gap-up today. After hearing the news of NSE shifting its expiry & then the HDFC-HDFCBK shares merger news — I assume few market participants would have already played forward.
US Markets ended weak yesterday, and there were no specific India specific good news — there was no way a gap-up was in the cards unless it was front running.
BankNifty
BN opened at 43804 and then had a flattish price move till 13.00 after which it propelled forward like a rocket. Interestingly Finnifty’s chart (which we will discuss shortly) had more thrust compared to BN & N50.
The 470 pts rally we had from 13.05 to close was nothing short of remarkable. Initially the momentum was slow, but as soon as the short covering started we had a broad based rally. None of component stock closed in red today. SBIN up 1.62%, HDFCBK up 1.41%, AXIS up 1.32%, KOTAKBANK up 1.19%.
1hr TF
If you remember from yesterday’s research report, BN was almost completing a double bottom pattern at the 43404 level. The last leg of W was fading, until we had the break through today.
What really happened today was the 44068 resistance was taken out, preceding that we had 2 strong green candles — most likely due to CE short covering.
Final close is some 100pts above the SR zone of 44068 which means there is every possibility BN could defend it for the expiry tomorrow.
Nifty50
Nifty opened right at the resistance zone of 18762 and then had a flattish pattern. Again the gap up would be due to front running by few players. Instead of falling to the previous close level — N50 held its ground and was aiming for resistance level breakout.
The price action was not as dramatic as BN or Finnifty as the resistance breach came in very late in the day i.e. at 14.10. Once it broke out from this strong hold, it rallied another 68pts within 1hr.
Today’s price move has shifted the bias to +ve and it may also have enough firepower to take out the ATH by tomorrow. RELIANCE, ITC & other FMCG stocks did not participate in the rally today — so it seems like tomorrow is going to be an interesting bull side day.
1hr TF
In yesterday’s research report I had indicated N50 showing a bearish bias. Mainly because we had a support breach after what it looked like a M pattern aka double top.
We have not completely negated that pattern, but the intensity with which N50 broke through the resistance — I will have to change my view. Technically N50 could push through the ATH by tomorrow as there is nothing resisting its way!
Finnifty Expiry Special
The trend started in Finnifty which was responsible for the last hour surges in BN and N50. If you look at the Finnifty chart today — it was positive right from the start.
From 11.10 to 15.10 we had a decent rise of 1.27% ~ 248pts. Today was the expiry day & till 14.00 we did not see any major impact to the options premium. But right after that the CE premiums were surging & had unbelievable intraday gains percentage wise.
19550 to 19750 CE were all out of money till yesterday’s close, but went ITM (in the money) by today. Percentage wise 19700 CE had a gain of 2170%, 19750 gained 1745%, 19650 gained 1536, 19600 gained 897%, 19550 gained 538%.
Today would have been a dream day for option buyers. I missed out on the opportunity today mainly because I assumed preponing the expiry day would result in selling and not buying. Hence my PUTS went worthless today!
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