04 Jun 2024 — Nifty & BankNifty almost hit the lower circuit ~ 10% intraday fall — PostMortem…
What a strange day it has been, the moment the market participants realized that BJP will not get a simple majority — we started falling. That realization came in the opening minutes and did not give me ample time to prepare.
Honestly, I did not expect such a move today. I really thought we would have the reaction on Wednesday instead. I was not really ready with my short position and to be frank, I lost almost 5 lakhs as opportunity cost today.
Nifty ended up negating the last 172 days of upmove, in the single daily candle of today. It is like watching your building collapse, something that you took 6 months to build.
Interestingly the reversal came at the 200 EMA and not at 21491. If you notice my chart, I do not have a support/resistance level between 21491 and 19855 — if we break that tomorrow, it is going to be a free-fall.
Stance updated to bearish till proven wrong.
Current, NDA 291, INDIA 234, Others 18.
BankNifty Analysis
The intraday fall on BankNifty was approx 5028pts ~ 9.84%, a few more points would have triggered the lower circuit and we would have had a pause of 30 to 45mts. The Lower circuit hit would have opened the floor to further fall due to panic and somehow magically the reversal came and it really saved the day.
If you look at the daily chart, the reversal came right at the 46284 support level, this was after breaking 48947, 48661, 48115, and 47465 (critical) supports. How that played out today was quite panic-creating.
Our stance is revised to bearish till proven wrong. Expecting some more volatility going forward, once the situation normalizes — will be more than happy to switch on the Algos with full thrust.
A coalition government is really good for the option traders, the uncertainty will spice up the option premiums. I could say with a decent level of confidence that a bit of fear is good for financial markets, after all, we were in a blind one sided rally.
Intraday Algos run via AlgoTest on Kotak
Webhooks automation run via TradingView on Dhan
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