13 Feb ’24 — Even after gaining 127pts, we are still neutral — Nifty & BankNifty PostMortem…
Nifty Analysis — Stance Neutral ➡️
We really thought the open may be flat and we would start falling, but to our surprise, we hit a session low of 21543 and then started climbing. By 11:11 Nifty had climbed an impressive 223 points ~ 1.04%. The options premium were totally weird today, an equidistant PUT and CALL options were trading highly skewed to the PUT side. Since we had some strangles on, we noticed even a premium spread of 1:2 wherein 1 lot of PE had the premiums of 2 lots of CE. Skews like these usually do not happen without a reason, in hindsight the reason was that the upside was capped. The PUT options were rightly priced and CALL premiums were not spiking — indicating that Nifty may not rise further. But this made no sense if you looked at the chart between 10 to 11 AM.
BankNifty proved to be a bigger disappointment today, despite gaining 620 points ~ 1.38% — it was unable to break the resistance. Just imagine, when was the last time an Index rallied greater than 1.3% and still had a bearish tone? NiftyIT had no plans of its own — it was jumping around from RED to GREEN for no reason whatsoever.
On the 63mts chart, Nifty is still neutral with no clear indication of the next direction. BankNifty is bearish and the chances of Nifty going down may be higher due to that. The first target to break should be 21491 below which the bearish momentum will pick up an avalanche effect.
BankNifty Analysis — Stance Bearish⬇️
BankNifty had a lot of anomalies today. Firstly, the start was slightly on the higher side and BN did not fall, unlike Nifty. We ended up defending yesterday’s swing low which came as a big surprise. You might remember, we had a bearish call for BN today and the fact that the downside move was not even attempted came as a shocker.
Secondly, BN ended up rallying 927pts ~ 2.07% intraday and was still unable to break the 45399 resistance. If you ask us, it did break the resistance on the 4mts & 16mts chart. But on the 63mts chart, it is still unbroken. ICICI Bank & AXIS Bank were in tremendous form today rallying 2.38% and 2.3% respectively. The bulk of the gains today came from these 2 counters. HDFC Bank showed some intent to break through the 1400 level but was cut short.
We are drawing a new trend line (purple color) — A bearish line. The difference here is that it is cutting through the candles on many occasions. Since it is not the perfect way to draw the line, we may even take it off shortly. The only reason we drew it was to plot the course BN is currently sailing. Tomorrow being an expiry day, we hope the bearish momentum will pick up the pace and the levels of 44542 and 44068 will get broken. The new purple line will serve as a dynamic resistance tomorrow.
Algo Trading
Our BankNifty algo trades ended today with a loss of 560 points.
· Intraday Algos run via AlgoTest on Kotak
· Webhooks automation run via TradingView on Dhan