If social media is to be believed, today was a hard day for both option writers and option buyers. The price action moved with aplomb in both directions, mowing down stoplosses rather hungrily. Choppiness is evident in the charts; no doubt about it.
The upcoming RBI policy meet has brought in some profit booking in the BankNifty. Both indices have taken support of the 200EMA on the 5min timeframe. On the daily timeframe, the Nifty has support at the 200EMA, while the BankNifty has taken support at the 50EMA.
India VIX for today: 23.57 (−0.25 / -1.04%)
Check out the charts —
- Nifty range: 11224.95 to 11064.90 (-160 pts)
- Bank Nifty range: 21936.50 to 21448.45 (-488 pts)
- Nifty50 Closing Advance/Decline Ratio: 35/15
My actions and interpretations for today —
First (and only) trade: My initial entry point was at the virgin central pivot which would’ve been a strong resistance, but it was crossed. However, I could clearly see that the price action on the BankNifty had the next good resistance at the weekly (green) and monthly(yellow) pivots. Still, I watched the price action carefully before putting a short order at the 18th candle. Despite my care, I got stopped out of the trade.
Review: The consolidation continued to be choppy before the fall I was looking for finally occurred. I did not reenter the trade as sometimes the virgin central pivot tends to be a strong support/resistance depending which side the price action is and being stopped out made me a bit uncertain as to the market direction. It felt good to see that my view turned out right after all.
I was not idle. I pared off the long-term portfolio and increased my positional of the index. I have a long way to go in my study of price action. I’ve marked, as always, better entry and exit points. While hindsight puts everything in perspective in a more easier manner, I’m hoping to train my brain in recognizing certain patterns in the future that will help me in realtime.
Wealth in toto 