Combined Post-Mortem for 31 May, 01 Jun, 02 Jun + Weekly Analysis of Thursday
I was not able to participate for any trading activity for these 3 days — 31 May to 02 Jun. The fever really held me down !
Let me try to assess what went through by looking at the charts. The analysis accuracy may be much lower than regular days where I see first-hand every price action.
31 May — breakdown
there was a noticeable gap down opening and quite momentum to bring down the prices to its 1st support area of 44068. From 09.20 to 11.30 prices did hold up the support. Eventually the support broke and from 11.35 we saw a good break down.
Again as usual the last 1hr to 90mts saw huge recovery enabling the banknifty to close above the 44068 SR line. Even though we had a hourly closing below the support line, the end of day negated that.
01 June Expiry Day
After I started expiry trading, this is the first one I had to miss down sick. I have traded expiry days with fever, but this time I could not even lift my head!
Thursday’s price action seems like was a walking trap to most bulls, the gradual rise in price levels from 09.20 to 13.30, and keeping it above the support levels of 44068 would have given the false hopes of bullishness.
The fall that followed i.e 473pts fall from 13.40 to 15.20 would have grilled most of them alive. Since it was expiry day, assuming most of them would have kept the option selling position unhedged seeing the gradual price grind.
I am feeling so bad to have missed this day now, the spike in PEs would have given some awesome money making opportunities.
This day the price definitely ended below the SR zone of 44068. If I take the 2 days together, the price close levels of Thursday is only 0.26% lower than the LOD of Wednesday. The broader point I am trying to prove is, some one rallied the markets from the LOD to get a positional trade going for expiry and then undid it. I haven’t read the news so I cant be sure what transpired in the last 90mts on Wednesday to have an anomaly.
02 June — Inside Day
Although the price swings were lower compared on 01 June, the volatility should have given a run for the money. Options premiums on both PE and CE should have surged and would have presented opportunities.
The lower total price swing of the day may also indecisiveness, which means Monday or Tuesday is going to be exciting !
From where I see it, banknifty was not able to take out the resistance of 44068 conclusively. From 13.10 to 14.00 it tried and failed. The rejection levels has been plotted on a Fibonacci chart for representation (although it cannot be taken seriously as 5mts TF is loo less a value to consider).
25th May to 1st Jun — weekly analysis
On an expiry week to week basis, banknifty had only gained 126pts between 25th May to 01st June. Unless you look at the price chart — you would not even know that a new all time high was hit and banknifty was hungry looking for more.
In a way a brief pull back would really do more good than harm, that is because a pause will enable the sanity to catch up. Again from the price action I am not sure why we had a reversal on 31st, will try to find it before the market opens tomorrow.
You can read my latest book on amazon “183 days of Post mortem on BankNifty” at just Rs99 — click here.