09 Feb ’24 — BankNifty retraces and defends the Support Level — Nifty & BankNifty PostMortem…
Nifty Analysis — Stance Neutral ➡️
Recap from yesterday: “Nifty is by no means bearish, unlike BankNifty which slipped into the RED today. If BN continues the southward journey tomorrow, most likely N50 will have to follow suit.”
Nifty creates a double bottom (W pattern) in the 4-minute time frame. Although we did not retest the 21913 support/resistance level which we broke yesterday, the entire price action today showed no intent of bearishness. The interesting part of the opening 2 hours today was that Nifty gave a false impression of bearishness. We fell to a swing low of 21629 by 11.03 and then reversed today. The reversal from that point was approx 175pts — it did not come in a fast and furious manner, rather it was a steady climb.
What would have happened yesterday would just be a blip, the price action of BankNifty today makes us think so. Or else why would it rally 622 points ~ 1.38% and reclaim the support level today? NiftyIT on the other hand was looking weak today and was contradicting the other index heavyweights. CNXPSE, Metals, Smallcaps, Midcaps, and Energy traded in the RED today.
For Monday, we wish to maintain our stance of neutrality. To go long the resistance of 21913 has to be taken out and to go short 21615 has to be broken first and then 21491. Wish you a happy weekend.
BankNifty Analysis — Stance Neutral ➡️
BankNifty defends the 45399 level with so much ease today. After witnessing the rout yesterday, we seriously thought BN would take longer than usual to recover the lost ground. Do you remember the discussion we had about the 2 strong RED candles before breaking the 45399 levels yesterday? Today’s counter-move made them look insignificant.
The intraday low was hit in the first candle itself and from that point, we had an intraday rally of 854pts ~ 1.91%. The closing was with so much strength and rightly so as once we broke through the 45399 resistance — BN bulls got so much hope & enthusiasm. Notice the encircled region and how we spent the time around the SR level before breaking out. The green candles were getting stronger with every iteration.
The last candle of today forms perfectly above the 45399 confirming the break. This nullifies yesterday’s fall and we are back into the neutral territory. For Monday we need to look for non-directional trades again and would only go short if the support breaks. To go LONG we have quite a distance to cover as just beating 46800 would not suffice.
Algo Trading
Our BankNifty algo trades ended today with a gain of 217pts. If you look at the chart below — you can see how difficult it was for the system to handle the reversals today.
· Intraday Algos run via AlgoTest on Kotak
· Webhooks automation run via TradingView on Dhan