22nd Dec ’23 — Nifty’s levels today are skewed by NiftyIT — PostMortem on Nifty & BankNifty
Nifty Analysis
4mts chart link — click here
Nifty’s price action was deceptive today, mainly because of the outperformance by NiftyIT(+2.27%). The real action today happened in BankNifty (-0.73%). Let me try to elaborate. Between 13.59 and 15.03 NiftyIT rallied 799pts ~ 2.29% in a surprising move. This skewed the Nifty50 numbers too. INFY, Wipro, HCL, TCS, and LTIM contributed 44pts out of 94 today.
NiftyIT 4mts chart link — click here
NiftyIT even though it started negative had a total swing range of 1029pts today. I guess NSE has to consider opening up FnO on NiftyIT seriously and set the expiries on Mondays. After all, we have 6 stocks of Nifty50 in BankNifty. Similarly, we have 6 stocks of Nifty50 in NiftyIT. Source.
63mts chart link — click here.
Since Monday is a holiday, it gives us added uncertainty on what to expect on Tuesday. Despite the 94pts gain by Nifty — I still see the price action as negative. I would like to go with a bearish stance for 26th Dec. A gap-up or gap-down possibility cannot be ruled out as we are going for the extended weekend with bad geo-political macros.
BankNifty Analysis
The trades on BankNifty were more practical and appropriate to the situation we have at hand.
4mts chart link — click here
We opened in line and then tested the top of the ascending channel from 10.03 to 12.03. There was rejection at those levels which took BN quickly to the bottom of the channel. We spent 13.43 to 15.11 at the lower end before breaking down. Even though the closing was below the channel, we ran out of time for conclusive evidence.
Yesterday we went with a neutral stance believing BankNifty will be able to lead the fight for Nifty50 today. What really happened today was NiftyIT taking the pole position and BankNifty breaking down.
63mts chart link — click here
The last 4 candles of today were in RED and we ended just below the channel. For Tuesday, I wish to go with a bearish stance. So at present, my directional view for both Nifty and BankNifty is bearish. Since we have a long weekend — anything could happen when we reopen on Tuesday. I have not taken any positions overnight and decided to play as per the situation after reopening.