21st Nov ’23–19776 is a strong SR zone — PostMortem on Nifty & BankNifty
Nifty Analysis
5mts chart link — click here
The open was right at the resistance level of 19776 and interestingly the day’s low was set in the opening 5mts itself. We kind of broke out from this support/resistance zone by 12.10 and hit an intraday day of 19829 by 12.25. Unfortunately, these extra gains did not get defended because Nifty50 closed right back at the SR level @ 19780.
One thing is sure, Nifty was not at all looking weak today — it defended its ground pretty well. As we discussed yesterday, we cannot go bullish until 19875 is taken out in a single attempt, today that did not happen hence it is better to look for non-directional theta decay strategies till we get a strong clue.
1hr chart link — click here
On the 1hr TF, we made an island formation today, the gap-up created that illusion. The orange support/resistance line is proving so vital now. One thing is for sure, we would need BankNifty to fire up and reverse course for any further bullish stunts by Nifty. There is no way Nifty can do it without the support from the Banks. I would prefer to maintain my neutral strategy till we take out the 19875 levels. On the downside, I would prefer to go short if 19562 is taken out.
BankNifty Analysis
BankNifty was perfectly neutral in trade today. I had a bearish call from yesterday but seeing the moves today it makes sense to switch back to the neutral mode. One reason why its not picking up direction would be attributed to the unavailability of information on the recent announcement by RBI. When the risk weights of consumer loans and credit cards were increased by 25% — maybe the market is still gauging the impact of this news.
5mts chart link — click here
Few major banks had reported the decision would be similar to a 55bps to 60bps rate in interest. Note, the interest rates are not getting raised, the sucking of liquidity will give such a perception. According to me, a 55bps rate hike kind of feeling is not something that should be taken lightly. Meanwhile, as a trader, I would prefer to wait for the markets to decide on where it goes next.
1hr chart link — click here
On the 1hr TF, BankNifty has fallen from the recent swing high of 44420, it had amassed gains of 2321pts ~ 5.51% between 26th Oct to 16th Nov (A short span), so it looks like the bulls have not given up yet, and the bears are still not able to make inroads. The support of 43566 has proven quite strong in the last 3 sessions and the next resistance of 44063 is quite far away. Since we are in an indecision zone, I would like to revise my stance from bearish to neutral and go short only if the 43404 support is also getting knocked out.