Bank Nifty EOD Update Mar 30

Bank Nifty was volatile today due to Monthly expiry and moved up sharply in last 30 minutes of the trade. It opened minor Gap down and moved further down making low of 21339 but sharply moved up towards 21500 level. It found strong resistance in 21500 zone through out the day! But moved sharply up in the end of trading session making all time high of 21696 and closing at 21620.

Most of the traders/technical analyst was expecting this sharp up move once Bank Nifty crossing 21500 as there was huge concentration of call options written at strike price of 21500. Once 21500 was taken away due to up move in the HDFC Bank that having highest weightage in Bank Nifty, short covering led to sharp rally of 200 points in Bank Nifty.

The 21500 call option was available at Rs 7-10 at 2.50-2.55 pm, by 3 pm it was trading at Rs. 120. A jump of 12-18 multiples. A small investment of Rs. 1200/- (Purchase price Rs 10/-, 120 nos of options) would have became Rs. 14400/- in a span of 10 min. Risk Reward Ratio was extremely high! Understanding Gann Methodology to trade options give you such kind of returns with very low risk!

Now Bank Nifty is reached at channel resistance. RSI on Daily/Hourly chart is also at resistance level. Hence, there may be correction or big break out in coming trading sessions.

Tomorrow above 21645 target is 21750/21840. Below 21596 target is 21500/21400.

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