24 Jan ’24 — The Trap Laid by the Bears is Bust Open — Nifty & BankNifty PostMortem Analysis
Nifty Analysis — Stance Neutral ➡️
The open was perfect — a good gap-down followed by selling pressure, but the 2nd candle gave it away. By 09.19 — the gap was officially closed and Nifty was steaming with upside momentum. A part of me believed that the rise-up was part of the lower-high creation and that the shape of the bear attack was still intact. My conviction was cemented between 10.35 to 12.39 wherein we dropped 195+ points. What happened next was simply dramatic. Nifty rose 266pts ~ 1.25% between 12.39 to close. In total, it swung 347pts from LOD to HOD, of which 76% came after 12.39.
The issue for the bears from the 63mts chart is the W formation (double bottom). To prove they are still in the game, the Bears must create a big fall and ensure an M pattern supersedes the W. Due to the momentum the bulls got today, we are changing the stance from bearish to neutral. The first target would be to take out the 214991 resistance and nullify the 5 RED candles formed on 23rd. If we were to move downwards, the swing low of 21372 has to be taken out tomorrow itself. Hope we have a volatile monthly expiry tomorrow.
BankNifty Analysis — Stance Bearish ⬇️
The stance of BankNifty continues to be bearish as it was nothing like the Nifty today. The major reason is the rejection of resistance at 45399. After opening near the support level of 44542, BN made a quick surge to the resistance of 45399 by 09.59. The rejection came by 10.43 and that RED candle spoke for itself.
We started falling and BN went underwater again by 11.27. Interestingly BN made a W pattern on the 4mts chart today — but it means nothing if the resistance is not taken out.
The first candle steals all the show today — its low right at the support of 44542, its high right at the resistance of 45399. Nifty will not be that strong in the upward direction until BN joins it. Right now N50 is neutral and BN is bearish. To lose bearishness, BN has to take out the resistance and close near 46151. Since both BN and N50 have an expiry tomorrow, it will be an option seller’s day as the premiums will be juicy enough.