PostMortem on BankNifty Today & Analysis of 18 APR 2023
One thing I noticed this week is the variance in volatility of Nifty50 vs BankNifty. On 99 out of 100 trading days - Banknifty used to have a higher volatility than Nifty & you know what higher volatility brings to the options trading. Yes - option premium anomaly.
Probably this variance was there earlier too, since I trade on BankNifty all the time - I rarely check the Nifty50 and FinNifty option premiums. But from the begining of April series - the option premiums were unusually low. I suspected it could be due to the high number of holidays this month.
The reality was something different,
BANKNIFTY was trading in a stable manner and the choppiness was visible in Nifty - this uncertainty made Nifty50 more susceptible to unusual option premiums.
Banknifty stayed in a range today, the price moves from open to 13.05 was perfectly inline with the trend that was set from the last 3 sessions. Let me zoom out and highlight it.
See the blue line, its almost a perfect straight line, the price action after 13.10 caused a blip. A fall of 387pts from the HOD to the LOD.
And why I said bank nifty was showing more signs of stability, this fall got arrested and the final closing was flat with a greenish tint.
Whereas
NIFTY showed weakness today also, not because of the IT sector (In fact IT was up 0.59%).
---
15mts shows no major weakness so far. The chart is still bullish. As long as 41624 is still intact - the chart will not reverse direction.
---
1hr also is looking decently good, Just the 13.15 candle stands out from the trade today. IfNIFTY shows further weakness ahead - I am not quite sure how long BANKNIFTY can stay in green.
---
Just like we started discussing Finnifty Expiry from the last week - lets do it every Tuesdays henceforth. I took the expiry trades today & once the HDFC-
HDFCBANK merger completes - it will be really exciting to trade CNXFINANCE because the top 4 weightage providing stocks will be the same.
So we can take part in 2 expiry days in the same week. This is a blessing for anyone who is actively following the financial sector & banks in India.
CNXFINANCE stayed in the range from the open to 13.25 today. The breakdown from the range came at 13.30, but anyone who looked at the red candles would have taken the trade in the short side.
This fall also did not last that long, the LOD was at 13.45 and we closed more or less near the lows.
The anomaly came in when the banks were doing good, but the HDFC & BAJFINANCE, BAJFINSV were pulling the index down. Thats why we had a flat day forBANKNIFTY vs red day for Finnifty.
FinNifty support is at 18722 which is where it took support today. Yesterday also the first hourly candle took support at this same level. If this breaks the next support comes at 18458.
Probably this variance was there earlier too, since I trade on BankNifty all the time - I rarely check the Nifty50 and FinNifty option premiums. But from the begining of April series - the option premiums were unusually low. I suspected it could be due to the high number of holidays this month.
The reality was something different,
BANKNIFTY was trading in a stable manner and the choppiness was visible in Nifty - this uncertainty made Nifty50 more susceptible to unusual option premiums.Banknifty stayed in a range today, the price moves from open to 13.05 was perfectly inline with the trend that was set from the last 3 sessions. Let me zoom out and highlight it.
See the blue line, its almost a perfect straight line, the price action after 13.10 caused a blip. A fall of 387pts from the HOD to the LOD.
And why I said bank nifty was showing more signs of stability, this fall got arrested and the final closing was flat with a greenish tint.
Whereas
NIFTY showed weakness today also, not because of the IT sector (In fact IT was up 0.59%). ---
15mts shows no major weakness so far. The chart is still bullish. As long as 41624 is still intact - the chart will not reverse direction.
---
1hr also is looking decently good, Just the 13.15 candle stands out from the trade today. If
NIFTY shows further weakness ahead - I am not quite sure how long BANKNIFTY can stay in green.---
Just like we started discussing Finnifty Expiry from the last week - lets do it every Tuesdays henceforth. I took the expiry trades today & once the HDFC-
HDFCBANK merger completes - it will be really exciting to trade CNXFINANCE because the top 4 weightage providing stocks will be the same.So we can take part in 2 expiry days in the same week. This is a blessing for anyone who is actively following the financial sector & banks in India.
CNXFINANCE stayed in the range from the open to 13.25 today. The breakdown from the range came at 13.30, but anyone who looked at the red candles would have taken the trade in the short side.This fall also did not last that long, the LOD was at 13.45 and we closed more or less near the lows.
The anomaly came in when the banks were doing good, but the HDFC & BAJFINANCE, BAJFINSV were pulling the index down. Thats why we had a flat day for
BANKNIFTY vs red day for Finnifty.FinNifty support is at 18722 which is where it took support today. Yesterday also the first hourly candle took support at this same level. If this breaks the next support comes at 18458.
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