20 Jan ’24 — Probably the first working Saturday for a Trader — Nifty & BankNifty PostMortem…
Nifty Analysis — Stance Neutral ➡️
Open was right at the trendline and it acted as a resistance. Nifty was unable to breach it and it meant we would have either a flat or negative day. A lot of interesting things happened today.
- NiftyIT moved down and ended with -371pts ~ 1.00%. Most of them would not have noticed IT falling.
- The banks outperformed today, Kotak +2.41%, AUBANK +2.32%, CANBK +2.22%, PNB +2.74% & ICICI +0.95%. If not for these, Nifty would have had a serious fall today
- Nifty’s low today was lower than yesterday’s low and it has closed the gap from 18th Jan.
- The OTMs of both Nifty and BankNifty were trading in green and sometimes had unusual spikes often seen during low liquidity. Despite the quick announcement to have a working day today — the actual traded volumes or contracts were not that bad either.
- Initially, we thought DII and FII would not participate, but they ended up selling 719 & 545 crores today
Nifty was unable to get into the ascending channel despite results from RELIANCE and major banks. We suspect some weakness is haunting N50. It could completely be news/event-driven or related to the build-up for the budget session. The selling figures from the institutions may be because of this. From a technical analysis perspective, Nifty looks range bound between 21913 and 21491. Falling below 21491 could auto-trigger further shorts and it could even be an avalanche. Our stance remains neutral for Tuesday, also note that Monday will be a holiday for the consecration of Ram Mandir in Ayodhya.
BankNifty Analysis — Stance Bearish ⬇️
For some or the other reason, the 4mts & 63mts charts are not visible on TradingView. It may be due to this unscheduled working day and they might be facing issues with data feeds from vendors. We had a bearish view yesterday also and despite BN ending the day today with 357pts ~ 0.78% we are still maintaining the bearish stance.
A shallow support and resistance zone has formed between 45609 and 46025. The first critical support is unchanged at 45399 and the critical resistance at 47465. BankNifty was single-handedly responsible for limiting the losses on Nifty today — so we need to give due credit for that. But take a look at the chart — The fall from 48000+ levels did not just come because HDFCBK had poor results, it may be unwinding by FIIs considering the fiscal policy changes or reforms expectations for Budget 2024. So even if we have super duper results like the KOTAKs and ICICIs — we may not scale up that quickly. Honestly, we prefer if BN could reclaim the ATHs and support Nifty to crawl back into the channel. The US market hit a new ATH yesterday — SPX and the mood is euphoric.
· Free charts made with ❤️ on TradingView