PostMortem on BankNifty Today & Analysis of 15 JUN 2023 Expiry
The beast in banknifty got unleashed today, after a long gap banknifty options really started surging today! You wont believe the OTM prices went above the traded range of Wednesday, that too today being an expiry day!
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BankNifty Weekly Analysis
During the current expiry week 9th to 15th June, banknifty shed 556 pts ~ 1.27%. You may not believe that 544pts i.e 97% of that came just in today's trade.
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Today's Analysis
We opened gapup right at the resistance level and then started falling. The first 5mts itself shaved off 200+ points. From there we had a steady falling day with no pull back.
The selling really aggravated at 13.50 when all of a sudden lot of traders unwound short positions in PE. BN was near 43700 then, the volumes in PE did suggest that few traders were running for cover fearing their position may go deep ITM.
This really fueled the next move. We fell another 300pts in 90mts.
Nifty50 was in green till then, see the blue highlighted area - the selling intensified in N50 too. Nifty50 at 10.00 was roaring past the resistance level of 18762 and was looking unstoppable. For the first time since Dec 2022, N50 tried to shoot for ATHs.
Banknifty had other plans, may be attributed to the FOMC meeting yesterday - which we will discuss shortly.
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15mts has now confirmed a break from the trading range, the last time it broke on the downside was on 24 May, which it recovered by 26th.
The pick-up in momentum after the range break also signifies unfinished business ahead.
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1hr TF also shows the range breakout, but the chart is not bearish yet. There are supports at 43253 & 43012 ahead. If banknifty is not stopping there - then it will be an interesting case for the July series. Remember we will have expiries on Fridays from 7th of July. The split of N50 and BN to separate days will definitely improve speculation.
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The curious case of FOMC rate pause
Yesterday US FED decided to keep the interest rates at 5.25%. Our RBI has kept the interest rate at 6.50%. Lets just analyze what this interest means for a foreign institutional investor.
Assumption: FII is investing in India's debt instruments & not equity
Investor has earmarked 100000 USD for investments. In US over a 1 year period his investment will grow to 105250 USD. Whereas if he invests in India it will grow to 106500 USD.
Now investment in India has to be done in INR, so there is a currency conversion risk. Lets just calculate how much was the USDINR appreciation for the financial year it was ~ 8.23%
So now Mr. Investor has 97735 USD left with him i.e. a opportunity cost of -7.51% if he chose India over his home country.
The best way RBI can tackle this issue is either get the USDINR to depreciate or hike the repo rate to have a higher divergence than FED rate.
to view all 6 charts visit viswaram. com
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BankNifty Weekly Analysis
During the current expiry week 9th to 15th June, banknifty shed 556 pts ~ 1.27%. You may not believe that 544pts i.e 97% of that came just in today's trade.
---
Today's Analysis
We opened gapup right at the resistance level and then started falling. The first 5mts itself shaved off 200+ points. From there we had a steady falling day with no pull back.
The selling really aggravated at 13.50 when all of a sudden lot of traders unwound short positions in PE. BN was near 43700 then, the volumes in PE did suggest that few traders were running for cover fearing their position may go deep ITM.
This really fueled the next move. We fell another 300pts in 90mts.
Nifty50 was in green till then, see the blue highlighted area - the selling intensified in N50 too. Nifty50 at 10.00 was roaring past the resistance level of 18762 and was looking unstoppable. For the first time since Dec 2022, N50 tried to shoot for ATHs.
Banknifty had other plans, may be attributed to the FOMC meeting yesterday - which we will discuss shortly.
---
15mts has now confirmed a break from the trading range, the last time it broke on the downside was on 24 May, which it recovered by 26th.
The pick-up in momentum after the range break also signifies unfinished business ahead.
---
1hr TF also shows the range breakout, but the chart is not bearish yet. There are supports at 43253 & 43012 ahead. If banknifty is not stopping there - then it will be an interesting case for the July series. Remember we will have expiries on Fridays from 7th of July. The split of N50 and BN to separate days will definitely improve speculation.
---
The curious case of FOMC rate pause
Yesterday US FED decided to keep the interest rates at 5.25%. Our RBI has kept the interest rate at 6.50%. Lets just analyze what this interest means for a foreign institutional investor.
Assumption: FII is investing in India's debt instruments & not equity
Investor has earmarked 100000 USD for investments. In US over a 1 year period his investment will grow to 105250 USD. Whereas if he invests in India it will grow to 106500 USD.
Now investment in India has to be done in INR, so there is a currency conversion risk. Lets just calculate how much was the USDINR appreciation for the financial year it was ~ 8.23%
So now Mr. Investor has 97735 USD left with him i.e. a opportunity cost of -7.51% if he chose India over his home country.
The best way RBI can tackle this issue is either get the USDINR to depreciate or hike the repo rate to have a higher divergence than FED rate.
to view all 6 charts visit viswaram. com
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