07 Feb ’24 — Nifty Passes the Fire Test — Stance Upgraded — Nifty & BankNifty PostMortem Analysis
Nifty Analysis — Stance Bullish ⬆️
Recap from yesterday: ” Nifty is still undecided on the 63mts TF and for that same reason, we wish to start the day tomorrow with a neutral bias and then go long if we have a green candle above the 21913 zone. Only if BankNifty lends support can we take out the ATH and there is no better day than the expiry day for such feats.”
The gap-up was much more than expected and we did not live well to that hype anyway. When we have a huge gap and the market starts to close, it accidentally builds momentum for the weaker hand and most of the time the scale tips in their favor. Luckily, the Bears could not capitalize on it today as Nifty fell 192 points ~ 0.87% from the highs, breaking the support of 21913. The recovery was not anything spectacular, Nifty just ended the day above the level of 21913 and for us, that is more than enough to change our stance from Neutral to Bullish.
NiftyIT reminds us of the night watchman in cricket. When there are only a few more overs remaining in a Test match — you send a tail-ender instead of your best batsman. Today when BankNifty started awakening, NiftyIT started giving up. What was the reason NiftyIT ended the day with a loss of -1.25% on an otherwise good GREEN day?
The Inverse Head and Shoulders look perfectly formed and since it is a high-accuracy pattern — we wish to put our weight behind it. The only thing standing in its way was the 21913 resistance, now the next target should be the all-time highs. Our stance for tomorrow is bullish and since these are all games of probabilities we reserve the right to be wrong as would like to keep the 21826 area as a good stop loss.
BankNifty Analysis — Stance Neutral ➡️
Unfortunately, BankNifty has not gotten a stance upgrade yet, we still are in neutral territory. Only if we get past 46800 — the stance can be revised. Our opening minutes were almost there ~ 46062 levels but we quickly lost ground. In total, we gave up 439pts ~ 0.95% from the highs — but this was not scary or unusual — it is just that a single 4mts candle at 11.31 stands out, it took out 109pts ~ 0.24%.
Till then BankNifty was looking quite okay with a gradually falling bias, that candle would have woken up the straddle sellers as their stop losses would have hit. If they kept the other leg open till the last minute, quite sure that would have given a scare too. Finally, we ended the day positively with a net gain of 127pts ~ 0.28%. The intraday day recovery of 317pts really helped BN gain back its lost ground to an extent.
Between the last expiry and today — we have just lost 0.12% ~ 53pts which is not significant at all. But what is more important is that the support of 45399 is defended properly. As we drew the IH&S yesterday — we need a close above 46800 for strong bullish momentum to pick up and most likely that should help us take out the 47465 resistance as well. Will it happen tomorrow? Not sure. Will it happen in the next expiry? We would like to place our bets.
Our BankNifty algo trades ended today with gains of 8204 rupees. The 11.31 stunt took away some gains, but we gained back the lost ground as further trades were not violent.
