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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VIX Analysis

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BankNifty Update For Jul-09,2020 - Weekly Expiry

Banknifty opened Gap up @ 22700 and then achieved all our bullish targets of 23900/23000. But the upmove was very choppy and looked like terminating pattern and was not easy to trade. So I did not take a trade on the upside. My observation was Banknifty good up (250-300 points) while Nifty was not at all moving up and was just 10-15 points up and VIX was increasing. That was a signal that there is a high probability of reversal. (I twitted this around 12.30 pm). Banknifty continued its upmove and VIX was not falling, so I was sure that reversal is on the card from the strong resistance zone of 23900-23000/50. In yesterday's post, I mentioned about daily RSI @ resistance. That was another reason I was expecting a high probability of fall after it moved higher levels to come to at least yesterday's close levels or below. I got down-trade from almost 23000 to 22700 (got out earlier as it was intraday and not much time left though I was expecting at least 22600. It gave a much lowe...

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