21 Jul ’23 Post Mortem on BankNifty, still in a bullish trend
Banknifty on the other hand was staying strong today, although it opened gap down, it closed down the distance in the opening 5mts itself. After hitting a new ATH of 46369.5, it started falling gradually.
Banks were not at all looking weak today. Infosys fell due to poor guidance & Reliance fell after the demerger activity. Financial sector along with pharma and auto was providing support to nifty today.
Between 09.25 to 12.25, banknifty shed 442pts ~ 0.95%, this was the period when nifty hit the initial low of the day. The real divergence came between 12.30 to 13.45 where banknifty retraced 318pts but nifty was unable to recover. A deeper look at the options flow would be useful to find the root cause why banknifty had no plans to fall today.
CALL credit spreads were not getting written, this usually drives the options premium and gives a clue if banknifty is about to fall.
The near money PUT premiums were not rising nor the implied volatility.
Banks cannot stay high in isolation, usually when nifty makes large directional movement - the components & sub indices also align their direction in tandem. This is true even if they are in a counter trend independently.
Banknifty is not looking bearish nor any short opportunity is directly visible, we will assess the situation on monday on how Nifty reacts to RELIANCE, SBI, ICICI numbers.
Banks were not at all looking weak today. Infosys fell due to poor guidance & Reliance fell after the demerger activity. Financial sector along with pharma and auto was providing support to nifty today.
Between 09.25 to 12.25, banknifty shed 442pts ~ 0.95%, this was the period when nifty hit the initial low of the day. The real divergence came between 12.30 to 13.45 where banknifty retraced 318pts but nifty was unable to recover. A deeper look at the options flow would be useful to find the root cause why banknifty had no plans to fall today.
CALL credit spreads were not getting written, this usually drives the options premium and gives a clue if banknifty is about to fall.
The near money PUT premiums were not rising nor the implied volatility.
Banks cannot stay high in isolation, usually when nifty makes large directional movement - the components & sub indices also align their direction in tandem. This is true even if they are in a counter trend independently.
Banknifty is not looking bearish nor any short opportunity is directly visible, we will assess the situation on monday on how Nifty reacts to RELIANCE, SBI, ICICI numbers.
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