18th Oct 2024 — Continuing the bearish stance + Trying out new Algo combinations + Nifty &…
Nifty Stance Bearish ️⬇️
We went short and Nifty is down 114pts ~ 0.46% in the last week. Even after the crazy price action on the 18th wherein N50 rallied 315pts ~ 1.28% from a new swing low of 24567, N50 is still in the RED territory .
50 and 200 EMA are still diverging showing signs of the bears starting to emerge. But this is not entirely confirmed, the quarterly results season is in play and we could see a pullback or fake bounce any moment. The other issue in our market is that the short covering forces the Bears to run when we pull up, fueling more bullish moves and new ATHs.
My stop loss would be 25080 above which I would exit the short position. On the daily TF we have a perfect Head and Shoulders pattern that could materialize over the next 1 month. I hope the bears will remain steadfast till then and not run away.
BankNifty Stance Neutral ➡️
In last week’s report, I did mention that we would be forced to exit the bearish position if we get a close above 51713. The fact is that we went above these levels by 15th October itself i.e. day 2 of this week. On Thursday, we melted and then on Friday, we saw the short covering that propelled us to close at 52138.
The short covering could entirely be because of HDFC and KOTAK bank quarterly results and the short-sellers would have panicked. I would like to inform you that the results are in-line and no major surprises. If the Bears are trying to get back into the game, they may do so in the opening hours of Monday 21st. To change my stance to bearish, we would need to close below 51713 now.
Meanwhile, I was backtesting and analyzing SENSEX in the hope that it could replace BankNifty for my intraday Algos. After 4 days, of analysis I have the following observations.
- Margin requirements for Sensex are much better than BankNifty.
- Exchange charges are much lower for Sensex. BSE will benefit a lot more as more traders will dump NSE.
- The reward to risk ratio is better for Sensex than BankNifty.
- The liquidity is lower and Bid/Ask spread is higher for Sensex than BN, I hope this will normalize once BN weeklies come to an end.
I strongly believe my algos could run on Sensex from December month onwards.
Intraday Algos run via AlgoTest on Kotak
Webhooks automation run via TradingView on Dhan