15 Feb ’24 — Nifty within kissing distance of a Bullish breakout — Nifty & BankNifty PostMortem…
Nifty Analysis — Stance Neutral ➡️
Nifty has lived up to the expectation today, the momentum it gained yesterday post 14.07 was legitimate. Not only did Nifty hold its ground today but showed intent to take out the 21913 resistance. The open was right at that zone but we quickly lost a few points. The candle at 09.47 carried the hidden message that a breakout was in the cards. That single candle had a swing range of 73 points. Even though we did not do anything unusual till 13.31 — the options premium was going crazy. One mistake I made was to switch to the next-weekly instead of the current one as I felt a breakout would happen post 3 PM. The break came early at 13.35 and what it did was shoot up the CE premiums, nothing unusual in that. But the PEs were not dropping in value. So on one side, my short CEs were trading in deep RED whereas the short PEs were not going into green.
Meanwhile, the breakout did not prove successful — but it definitely woke up the bulls. Almost all the top 8 components were reacting positively to this break. The final close was right near the 21913 SR zone. Over the last week, Nifty rose 166 points ~ 0.76% and if you notice the 63-minute time frame — it has formed a triple bottom-like formation on a descending trendline. Since Nifty already retraced back to the resistance level — we assume it is ready for the next leg of outperformance. The first thing it has to make sure tomorrow is to defend the 21913 levels — if it falls below that, the bullish breakout will not pick up pace. A gap-up is ideal as it will quickly tip the balance to the Bulls as short sellers will have to run for cover. We wish to change the status from neutral to bullish only if we get a 63mts candle above the 21913 resistance line.
BankNifty Analysis — Stance Neutral ➡️
BankNifty also does not get a stance revision today, but the progress it has made in the bullish direction is commendable. The first thing it did today was to defend the descending trendline (see encircled region). And from there it almost followed a steady 45-degree climb — showing strength. Except for the first 45 minutes, we did not have a selling pressure or a bear attack. It seems like the bears had thrown in the towel yesterday itself.
In the 63mts chart, BN’s ability to defend the support is second to none. The only reason it is stuck in the neutral zone is because of the bear attack it had on 17th Jan. We are almost getting to those levels now. BankNifty’s contribution is very crucial to help Nifty’s next move. Since N50 is waiting to go bullish, a mere push from BN will give a multiplier effect due to the weightage it carries. For tomorrow we wish to start the day with a neutral stance and go bullish only of 47016 trend line is getting broken.
Algo Trading
Our BankNifty algo trades ended today with a loss of Rs3190
· Intraday Algos run via AlgoTest on Kotak
· Webhooks automation run via TradingView on Dhan