PostMortem on BankNifty Today & Analysis of 20 JAN 2023

2023年1月20日

Pretty unconvincing price action by BANKNIFTY today morning esp after US markets SPX fell 0.76%, DJI 0.76% and NDQ -1% overnight. This is in addition to the fall on 18th. SPX has now fallen consecutively for 3 days from the resistance level of 3991 & now 3945.

We hit the resistance of 42573 in the 2nd candle itself and a consistent rally from up there, a total upmove of 0.97% ~ 409pts by 10.40.

Infact the 15mts TF were showing all green candles when i felt the options data was not agreeing to the move. The premiums of the CEs were not surging suggesting a further upmove. Nor the ATM & near ATM PE options were surging with volume indicating the lack of option writing.
Having an opinion or a view is something & getting it correct pure luck these days - esp with the market conditions now.
So from this HOD we started falling and by 14.35 we were convincingly below the SR level - which proved the upmove was fake.
There are 2 miracles today
The open & close of BN is almost same (42516 & 42514)
BN ended the day with gains of 0.42% against all macros & fundamentals.

The centre budget is now 10 to 11 days away & we anticipate more price action & volatility once insiders get understandings about taxation, policy changes & other macros. Luckily we can react to what insiders are trading based on the open interest data of options - which will give enough clue. Its the best data the retail trader has got.

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Bank nifty components also behaved quite differently today. HDFCBk and HDFC were lending huge support to the NIFTY index as well - again the traders were expecting a positional fall in reliance due to results. And due to this compensation the Nifty index did not take a huge beating.
HDFCBANK was rock solid today gaining 1.33% ~ 21pts by 09.25 with good volumes. This gain was maintained throughout the day with no pull back or retracement. HDFCBk is now up 5.79% from the lows set on the results announcement day.
ICICIBANK is still in the range, but the opening candle did have real good volumes mainly for the results that are due tomorrow. From HOD to LOD there was a fall of 1.2% but it never went into negative territory.
SBIN also never went negative today, but a single candle at 14.25 seemed pretty scary. Even though the prior price action shows negativity - today's action shows ability to hold support.
AXISBANK did not oscillate that much today, for a brief period of time it went below water but final close was flattish.
KOTAKBANK did show weakness before the results due tomorrow. Surprisingly the volumes came not in opening minutes but between 10.35 to 10.55. If we consider the previous day's pattern also - its showing bearishness.
INDUSINDBK had a good swing up & down today ~ 2.36% but not as much as we saw yesterday. Also the volumes were half of that of yesterday.

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Confusing chart patterns as of now for 15mts & 1hr TF. 15mts showed a possible breakout from range today forenoon, but its failure has now negated a bullish case.
1hr is not showing any direction at present - for me it looks scary because if it spends time in a range for so much time the breakout or breakdown momentum is going to be so huge. Now the good thing about this is the options premium will be over priced when this happens & its a good time to go fishing premiums !!!

To view the 4 charts & 2 tweets today, contact viswaram