PostMortem on BankNifty Today & Analysis of 01 FEB 2023 budget

1 de fev. de 2023

Writing about what happened today is one thing, being alive as a trader after watching each 5mts candle - priceless!

After what happened today, i am almost 100% certain that my report will not holistically include all the information there is. Let me still try !

Gap up opening at 41115 above the resistance level 40868, till 12.15 we literally did go nowhere - just a decent range bound trade with a positive bias. The Union budget did commence at 11.00 and its interesting that we did have only a 0.3% move till 12.15. But what did really happen was the massive drop in options premium as the volatility fell. It was a dream come true for option sellers if they closed the trades now & exited.

After that the things got really out of control. A 1.84% ~ 770pts rally from 12.20 to 12.55 knocking out 2 more resistance zones via 41629 & 41940. Most of the traders would have prepared for this move - the CE options premium were comparatively higher than the PE counterparts because of this.

From this high point of the day, we had a fall of 5.97% ~ 2507pts to the low of the day. I am 100% sure no trader would have planned for this to happen. Even i got it wrong, i had a perfect debit ratio spread of 40000/39900 & i exited it prematurely at 13.55 assuming that the support zone of 40868 will hold.

This move of 2500+ pts took out 7 support/resistance zones - the intensity of the fall shot up the options premium back again. India VIX which was almost 10.5% down shot up back to zero levels.
Well this move was due to the news flow in #adani group again. This put immense pressure on banking stocks.

We also did discuss how the FPO was manipulated, stocks kept in green - see what happened today -  BANKNIFTY lost more than what it gained yesterday, the sentiment now strongly shifted to the negative side.

15mts chart shows the reversal at 12.15 really put out the spirits of the bulls

1hr chart on the other hand - is now showing the recent pullback from 39421 levels will be tested & broken soon.

Tomorrow's expiry day is going to be as eventful as today - we are expecting the US FED interest rate by 00.30 tonight. If they deliver rates of 50 bps or more - US markets will fall for sure. Giving momentum for further fall in Indian markets tomorrow.

On the other hand if the FED remains dovish US markets will rally as SPX is already above the descending channel (indicating further breakout). This might bring in some consolation for Indian markets tomorrow.

The Fibonacci levels marked - we had an entire swing from 0% to 70% on this scale - really mindblowing !

to view the 6 charts in today's report visit viswaram. com