Postmortem on #BankNifty - 04 OCT 2022
Banknifty opened gap up right at the resistance level 38700, remember the last day it closed right at the support level. This gap up opening took out the resistance level in the first candle itself and there was no looking back.
Never in the day today BN tried to close down the gap or even test this new support line, there was no meaning full dip too in the day. Somehow conveying the meaning that today’s trade positions were preplanned and executed as per script.
Notice the small range BN formed from the 4th candle till the close of trade. This ensured that all the option premiums fell, also since tomorrow is a holiday - the premiums were quite like a wednesday today.
Most of the option sellers who had carried forward the positions from yesterday or last week would have benefited from the fall in IVs and the range bound trade. It would also have benefitted the intraday straddle sellers - but those who entered the trade after 9.35.
If we analyze the options data, the OTM PE 29500 which is the farthest was traded for 76.67 lakh qty with a value of 22620 crore. This again shows the intensity with which the sellers/buyers would have engaged. This position would have favored the option sellers more as 1 DTE the change of 29500 closing in the money would mean a drop of 9500 pts ie 24%. Only a nuclear war threat can take out the index that low.
This is much similar to the 1crore trades done on the OTM CE option last expiry!
5mts TF negating a lower low formation with a break away gap.
1hr TF shows the gap beautifully, much like a flag formation. If it takes out the next resistance it will negate the downside gap it had formed on 26th Sep.
Bank nifty important support and resistance liness1:38698, s2: 37946r1: 39326, r2: 39739
more ideas at viswaram.substack.com
no predictions, no trade recommendations !
Never in the day today BN tried to close down the gap or even test this new support line, there was no meaning full dip too in the day. Somehow conveying the meaning that today’s trade positions were preplanned and executed as per script.
Notice the small range BN formed from the 4th candle till the close of trade. This ensured that all the option premiums fell, also since tomorrow is a holiday - the premiums were quite like a wednesday today.
Most of the option sellers who had carried forward the positions from yesterday or last week would have benefited from the fall in IVs and the range bound trade. It would also have benefitted the intraday straddle sellers - but those who entered the trade after 9.35.
If we analyze the options data, the OTM PE 29500 which is the farthest was traded for 76.67 lakh qty with a value of 22620 crore. This again shows the intensity with which the sellers/buyers would have engaged. This position would have favored the option sellers more as 1 DTE the change of 29500 closing in the money would mean a drop of 9500 pts ie 24%. Only a nuclear war threat can take out the index that low.
This is much similar to the 1crore trades done on the OTM CE option last expiry!
5mts TF negating a lower low formation with a break away gap.
1hr TF shows the gap beautifully, much like a flag formation. If it takes out the next resistance it will negate the downside gap it had formed on 26th Sep.
Bank nifty important support and resistance liness1:38698, s2: 37946r1: 39326, r2: 39739
more ideas at viswaram.substack.com
no predictions, no trade recommendations !
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