01 Sep ’23 Post Mortem on Nifty & BankNifty | What a dramatic reversal
Nifty Analysis
If you had witnessed the price action, then today’s performance was the total opposite. This is what I said yesterday “I wish to change my stance to bearish for tomorrow unless the 19310 resistance is breached.” and guess what — we had the break of resistance in the first 30mts itself.
Who would believe we had a 203pts intraday rally today and not just the break of resistance. As soon as the 1hr passed above the 19310 levels, I had to go long today — because the momentum was in favor of the bulls.
As it stands Nifty has made its 3rd attempt to break away from the bearish channel. Remember the first 2 attempts were rejected wherein Nifty was pulled back. Today’s price action is quite different — the leap in points came during trading and not by gap-up signifying a shift in the sentiment.
Opening gap-up and then not sustaining is just euphoria & will fade out pretty soon, whereas the gains or pains made during trading hours shows mass market acceptance. The number of green hourly candles today = 5 and the red ones = 2 with no body. Nifty is back at the 19450 levels, something already tested on 30th Aug.
Except pharma all the other sectors were in green today, the biggest gainers being the Metals +2.88%, Energy 2.37%, Commodities 2.02% & Auto 1.65%. Was it the good GDP data that propelled this result today — I am not sure, but it was quite entertaining to watch & participate.
If you were also short like me for today, there is a high possibility that you would have run into losses just like me. What we need to learn from this is — we hope and plan for X to happen and most likely Y happens. If trading was that easy, then everybody would have made it.
As it stands, I change my stance from bearish to 60% bullish & 40% neutral for Monday 04 Sep. The moment 19564 gets taken out my stance will be 100% bullish
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BankNifty Analysis
Banknifty on the other hand dipped first before reversing unlike Nifty which held its ground in its opening candle. We hit a low of 43830 before reversing in what looked like a dream run. The points gained an impressive 737pts ~ 1.68%.
The bulk of the gains today came in 2 hourly candles @ 12.15 and 13.15 respectively as banknifty had the important milestone of 44068 to get past. Once that was broken out — the path and intent were clear.
Today’s price action in general gave a strong sentiment change to banknifty. Since the resistance was taken out — the bears have been pushed to the back seat. I wish to maintain the stance of neutral till the 44896 swing high is successfully broken.