12th Dec ’23 — We have a change in stance today!
Nifty Analysis
4mts chart link — click here
Even though we had a gap up opening, the same did not sustain and the round of selling started by 10.07. The selling momentum did not pick up until 12.19 post which we fell almost 150pts. Although the final closing was at 20906, it ticked my checklist for the stance change. My view for tomorrow is neutral. Even BankNifty has a stance change today (will discuss that shortly).
A wolf dressed as sheep today was NiftyIT. INFY had a negative start as its ADR was down 3% after the news of CFO leaving. To compensate for that TCS was trading with super gains. This kept the NiftyIT index above water till 14.31.
Nifty IT 4mts chart link — click here
Then at 14.35 we had a good red candle that tipped the scale and guided Nifty50 to accelerate the fall. Why I said the wolf among the sheep is because NiftyIT retraced those points and ended the day flat. There was a 167pts ~ 0.5% recovery between 14.51 to 15.07. All eyes are on tomorrow if NiftyIT will go green or not. NiftyIT has played a good role in the recent rally of Nifty50.
63mts chart link — click here
Nifty can fall a lot more and still be in the uptrend. That is because we are well above the ascending channel. But from a real price action perspective, I have changed my ultra short-term stance to neutral now. To gain back the bullish momentum, Nifty has to close above 21037. To go bearish, Nifty has to fall below 20691.
BankNifty Analysis
BankNifty had a better price action today than Nifty. In the sense that the down move was more stable and compelling. Since yesterday we said we would love to go neutral below 47000 — we are changing the status now.
4mts chart link — click here
Even though the day’s low was only 47004, I would prefer to go with the status change because of 2 reasons.
- FinNifty had a dichotomy with BankNifty today — this may be expiry-related.
- After 11.00 AM, BankNifty had no attempt to go up, it was just too tired to even try.
We got the inflation data today, India’s Retail Inflation 5.55 per cent in November 2023.
Vegetables 17.7% inflation, fruits — 10.95%, cereals — 10.27%, pulses — 20.23%. Quite surprised to see fuel and light deflated to -0.77% even without a fuel price drop. Crude oil has fallen 40% and yet we do not have a cut in petrol or diesel prices. Inflation hits the most for the poorest segment of the population where the marginal propensity to consume is higher.
63mts chart link — click here
BankNifty is also above the ascending channel, only if it drops below the lower limit we can really get into a bearish zone. But looking at the price action today, I would like to play tomorrow’s expiry on a neutral tone.