1st Dec ’23 — Nifty on the cusp of Breakout? — PostMortem on Nifty & BankNifty
Nifty Analysis
5mts chart link — click here
It is official guys, we have a new all-time high — 20291.55. Things were looking long right from the gap up. The first 5mts candle continued gaining momentum despite the gap-up, usually we see some profit bookings — but today was different. Overnight exit-polls results may have enticed the markets and the gap-ups are the secret weapon Nifty uses to overpower the bears.
1hr chart link — click here.
Once Nifty broke out from the 19875 levels, the long-only stance has given multifold returns. With all eyes on the Dec 03 election results, a stable political environment is the best case for the markets. A coalition or an upset is not usually good for the markets in the short-run. And I would not prefer to apply technical analysis for Monday as it will be overpowered by News flow. But I still prefer to go long.
1D chart link — click here
On the daily time frame, Nifty has broken out from a previous ATH that was hit on 15th Sep. We almost went down 6.6% before reclaiming the top. I would like to see this as a breakout with a new higher high in the cards. For this to happen, BankNifty has to reclaim its ATH (will discuss this shortly).
BankNifty Analysis
Nifty had the gap-up today, whereas BankNifty opened inline but just above the resistance level. 44542 quickly became support and was bid goodbye with the consecutive green candles till 09.50. After that the momentum on BankNifty stalled and we had a flat trade for the remainder of the day.
5mts chart link — click here
BankNifty gained points during trading hours i.e. active trading vs Nifty’s Gap-up. This shows real courage among the BN bulls.
1D chart link — click here
BankNifty has another 1555pts ~ 3.4% to reach the ATH. From the chart above — you can see we dropped 9% after hitting the double top (M pattern). Nifty’s next action is hugely dependent on BankNifty’s attempt to regain the ATH. I would still like to continue with my bullish stance until proven wrong by taking out the supports. Will trade the morning hours of Monday with a bit of caution as the election results may play spoilsport.