29 Jan ’24 — All 6 Green Candles, Nifty Stance Upgraded — Nifty & BankNifty PostMortem Analysis
Nifty Analysis — Stance Bullish ⬆️
Recap from yesterday: “Yesterday’s W pattern is no longer valid as today’s action has nullified it. Our stance continues to be neutral with a slight inclination to the bearish side. It seems like FIIs are not done unwinding their positions — the run-up to the Budget 2024 looks interesting.”
Two major things stand out today
- Nifty gets a small gap-up, but most gains came via trading — which shows how the control went to the Bulls.
- Zero pullback — one-way trip.
Gifty was contradicting with a value of 21650+ and Nifty50 pre open was suggesting only an open around 21450 levels. The 200pts variance seemed pretty odd earlier in the day, but once N50 started steaming ahead — it made perfect sense. From the previous close, Nifty went up 394pts ~ 1.85% today — most importantly it took out the 21491 resistance with so much ease. The only thing that did not make sense today was India VIX rising 13% to 15.6 levels.
We are changing our stance from neutral to bullish as we had all 6 green candles today. Ideally, the stance change should come only after the 21913 resistance breach — but we are taking a bit of risk here. The pattern played out to be a W (double bottom). We would now look for bullish opportunities and the first target would be 21913. The global macros are not looking good with the war in the Middle East, news from Taiwan, and news from N Korea. Hope our markets will give a strong clue in case the situations escalate.
BankNifty Analysis — Stance Neutral ➡️
BankNifty also gets a stance upgrade — from bearish to neutral. The price action was not as beautiful as Nifty50 today. One reason would be the outlier performance by Reliance today +7%, whereas the main weightlifters for BankNifty were HDFCBK 1.38%, Kotak +3.08%, ICICBank 0.64%.
The support/resistance of 45399 was in play today and it proved quite sticky. Although BN got to this level by 09.31 — we never had a strong breakout today. On the 4mts TF it appears we broke the resistance between 09.59 to 11.15 — but it was not strong enough as we fell back to it by 11.19. On a close-to-close basis, BankNifty gained an impressive 576pts ~ 1.28% but the charts do not signify a bullishness yet.
The pattern formed today more or less looks like a flag formation — so the bullishness could come at any moment. BankNifty has a lot of catching up to do, so the run could get quite wild too. If the FII selling in HDFCBK has ended, it could be a good relief to the Bulls. We have changed the stance from bearish to neutral as BN has defended the 44542 support & is just above the 45399 SR. The moment we break these supports, we will go back to bearish mode.
Our BankNifty algo trades ended today with a loss of 608 rupees per lot
