18th Oct ’23 - BN leader during trend reversals - PostMortem
BankNifty Expiry Analysis
Between the last expiry and today, BankNifty lost 630pts and almost 82% of that came today. Interestingly the stable support level of 44068 is now breached. Remember we went below this level on 31-Aug, 04-Oct and 09-Oct and we managed to climb back every time. Will it be different this time?
BankNifty Today Analysis
The leader during reversals is always BankNifty and it is visible today also. Nifty had a similar opening candle, but the next few minutes were negating it and moved up. BankNifty on the other hand did not go up strongly. The fall from 44390 was almost 519pts ~ 1.17% which cut through the support of 44068 with so much ease. Remember this was the same support zone that had rejected all 4 prior fall attempts.
After falling below the 44068 levels, there was no attempt to climb back - a sign that bulls may have lost control. If it stays below this level for tomorrow, the selling is just going to intensify.
On the 1hr chart, the 10.15 candle that took out 422pts ~ 0.95% stands highlighted. Never before did we have such a strong candle right at the support area - going by the intensity, looks like further move may come on the downside instead of rejection. What really caused this panic selling? Not sure. Surprisingly the India VIX is still at 10.96 and US VIX is at 19.00 - the gap between them is a whopping 73.3%.
Ideally, the implied volatility has to pick up for strong downward price action. A glimpse of that was very much visible in the options prices today. Going by the options flow and since we broke the support, I wish to change my stance to bearish. My first target would be 43735 and then 43519.
Between the last expiry and today, BankNifty lost 630pts and almost 82% of that came today. Interestingly the stable support level of 44068 is now breached. Remember we went below this level on 31-Aug, 04-Oct and 09-Oct and we managed to climb back every time. Will it be different this time?
BankNifty Today Analysis
The leader during reversals is always BankNifty and it is visible today also. Nifty had a similar opening candle, but the next few minutes were negating it and moved up. BankNifty on the other hand did not go up strongly. The fall from 44390 was almost 519pts ~ 1.17% which cut through the support of 44068 with so much ease. Remember this was the same support zone that had rejected all 4 prior fall attempts.
After falling below the 44068 levels, there was no attempt to climb back - a sign that bulls may have lost control. If it stays below this level for tomorrow, the selling is just going to intensify.
On the 1hr chart, the 10.15 candle that took out 422pts ~ 0.95% stands highlighted. Never before did we have such a strong candle right at the support area - going by the intensity, looks like further move may come on the downside instead of rejection. What really caused this panic selling? Not sure. Surprisingly the India VIX is still at 10.96 and US VIX is at 19.00 - the gap between them is a whopping 73.3%.
Ideally, the implied volatility has to pick up for strong downward price action. A glimpse of that was very much visible in the options prices today. Going by the options flow and since we broke the support, I wish to change my stance to bearish. My first target would be 43735 and then 43519.
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