PostMortem on BankNifty Today & Analysis of 24 FEB 2023
Bank nifty price action is getting exciting day by day, TradingView has opened up this feature called as Minds (with the call out icon) - its like a running commentary we can do while the trades are taking place.
Let me explain few pointers posted in the TV minds & why it made sense then.
BANKNIFTY opened gap up at 40259, the first 3 candles looked quite promising that BANKNIFTY will break away as the gap up took out the resistance 40134. Majority of the traders & investors would have sided towards the long side - however the put options volume were not lying. Thats when we posted this -
"BANKNIFTY looking at the PE options volume we feel some bulls got trapped"
What happened from 09.25 to 14.25 was that bank nifty lost 1.3% ~ 524pts & all those who went on the long side would have either hit the SL or exited at a huge loss afterwards.
When the prevailing trend is bearish, any rise will give the big boys opportunity to short further - thats what was happened. For the people who went long - they were expecting the assist from short covering, but that never came.
The 2nd trap came at 14.00 candle, the nicely looking red candle would have forced more people to buy PUT options & take the bearish trade. Thats when we posted this:
"BANKNIFTY 39742 still my laxman rekha for further bearishness"
Its because 39742 is still the major support & we will not have momentum until thats taken out. If we go by the higher time frame - you will get it spot on.BANKNIFTY is literally stuck here, we are bearish but not very-bearish.
39742 has to be taken out via an aggression or via gap down - which we feel will happen in the coming days & this will fuel both the options premium as well as the directional move you were looking for.
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15 mts TF will show the 66 bars ~ 2 days that we are stuck in this small SR zone.BANKNIFTY looks like catching breath for the next move. So ideally this is a no trade zone for directional strategies.
---
1hr TF has made a beautiful arch, well the arch is not the important aspect - but the retouch of the support level is. Many days of waiting and an important support level of 39742 to break !
Let me explain few pointers posted in the TV minds & why it made sense then.
BANKNIFTY opened gap up at 40259, the first 3 candles looked quite promising that BANKNIFTY will break away as the gap up took out the resistance 40134. Majority of the traders & investors would have sided towards the long side - however the put options volume were not lying. Thats when we posted this -"
BANKNIFTY looking at the PE options volume we feel some bulls got trapped"What happened from 09.25 to 14.25 was that bank nifty lost 1.3% ~ 524pts & all those who went on the long side would have either hit the SL or exited at a huge loss afterwards.
When the prevailing trend is bearish, any rise will give the big boys opportunity to short further - thats what was happened. For the people who went long - they were expecting the assist from short covering, but that never came.
The 2nd trap came at 14.00 candle, the nicely looking red candle would have forced more people to buy PUT options & take the bearish trade. Thats when we posted this:
"
BANKNIFTY 39742 still my laxman rekha for further bearishness"Its because 39742 is still the major support & we will not have momentum until thats taken out. If we go by the higher time frame - you will get it spot on.
BANKNIFTY is literally stuck here, we are bearish but not very-bearish.39742 has to be taken out via an aggression or via gap down - which we feel will happen in the coming days & this will fuel both the options premium as well as the directional move you were looking for.
---
15 mts TF will show the 66 bars ~ 2 days that we are stuck in this small SR zone.
BANKNIFTY looks like catching breath for the next move. So ideally this is a no trade zone for directional strategies.---
1hr TF has made a beautiful arch, well the arch is not the important aspect - but the retouch of the support level is. Many days of waiting and an important support level of 39742 to break !
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