12 Feb ’24 — Nifty Breaks the Swing Low, Support Approaching Soon — Nifty & BankNifty PostMortem…
Nifty Analysis — Stance Neutral ➡️
Recap from yesterday: “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”
Nifty opened a bit gap-up and then started declining immediately. It made a two-legged downward move today taking out the swing low of the last session. The difference between the high and low of the day was 257 points ~ 1.18%. It may not sound that weird as technically Nifty is still in neutral territory. What was more interesting was the stark contrast between NiftyIT and BankNifty today. From the opening minutes, NiftyIT was in strong green whereas BankNifty was facing southward. NiftyIT ended up with a gain of 0.79% whereas BankNifty ended up losing 1.65%.
Global macros were not that disappointing, we assume today’s break had something to do with the “Farmers Protest V2.0”. Guessing it may really impact the Lok Sabha Elections 2024 outcome. Coming back to the technicals — we still need Nifty to break the support of 21491 to go strongly bearish. Whereas BankNifty is already in bearish territory today as its support was broken today.
For tomorrow we wish to keep our eyes open for any bearish clues although we wish to stay neutral to start with. As always, we prefer BankNifty to make its move first and then Nifty50 will align itself to that direction. You might be bored listening to our phrase “BankNifty is still the torch bearer whenever Nifty50 intends to change direction”.
BankNifty Analysis — Stance Bearish⬇️
We expected BankNifty to stay neutral today after what it did in the last session. Just to recap, BN broke through the resistance of 45399 last session and ended the day near the highs. We were expecting that momentum to continue today also as Banks had no inherent weakness to start with. But what happened today was unexpected — the swing range was a whopping 1118pts ~ 2.44%. And today’s low took out the last session’s swing low as well.
If you notice the encircled region, once BN broke the support of 45399 — it attempted to go up but failed miserably. That was the exact phase where we understood that the Bears may overpower the Bulls. We fell 715 points ~ 64% right from those levels. So in case you got into the bearish stance late in the day — you would have still ended up the day in pretty good greenery.
44542 support level is quite near and BN tested 44633 levels ~ 91pts away. If the Bears are still in form tomorrow, we should expect the 44542 to be taken out in the forenoon session tomorrow. The next level in play would be the most important 44068 levels. We wish to start the day tomorrow with a bearish stance and take up short opportunities as and when it present itself.
Algo Trading
Our BankNifty algo trades ended today with a loss of 2538 points.
· Intraday Algos run via AlgoTest on Kotak
· Webhooks automation run via TradingView on Dhan