27th Dec ’23 — Nifty & BankNifty stance changed to Bullish — PostMortem on Nifty & BankNifty
Nifty Analysis
Recap from yesterday: “I am forced to change my stance from bearish to neutral as the price action now shows a higher tendency to go up rather than down. Those strong RED candles of 20th Dec still haunt me — but it has failed to gather the momentum of the other bears.”
4mts chart link — click here
Nifty got a stance change from bearish to neutral yesterday and look what happened today, once we took out the ATH — the followthrough momentum pumped another 75+ pts. Trading was not profitable for me today even though the charts do not show any visual proof of anomalies. I guess it had more to do with the VIX staying so high that the premiums were not behaving as usual.
We had a gap up followed by a steadily rising price to take out the ATH by 12.03. This prompted me to change my stance from neutral to bullish. Then we fell 97pts almost giving me a shock. For a moment I thought my decision to change the stance was a blunder. I got the reassurance only when we had the 2nd leg of the rally that surged 170pts ~ 0.79% to take Nifty to a new ATH of 21675. Later I came to know those solid green candles at 14.59 to 15.07 were resultants of FII buying.
63mts chart link — click here
Nifty has created another bullish trend line above the ascending channel. The level of euphoria is beyond compare & N50 has managed to give stellar returns this calendar year. We just have one more day for the monthly, and quarterly expiry. I am not quite sure by what time I will be able to write the report tomorrow as it is my wife’s birthday. Anyway — I will be hoping for a bullish continuation and a new top for tomorrow.
BankNifty Analysis
BankNifty is still caught between the upper & lower end of the ascending channel. Even then it managed to scale to a new all-time high of 48347. Half of the traders would have thought BN would have expiry today, the best way to remember would be to use post-it-notes saying BN expires with Nifty on the last week of the month.
4mts chart link — click here
BN also had a slight gap-up, but the leg1 of the rally was quite strong. We gained 480pts ~ 1.01% till 12.07 before giving away 356pts ~ 0.74%. Leg2 it rallied 458pts ~ 0.96% but not enough to break out of the channel top line.
63mts chart link — click here
Once BN got back into the channel — it is finding it difficult to break down or break away. Somehow the boundaries are getting respected. BN hitting a new top ensured that the stance changed from neutral to bullish. I am seriously thinking if the momentum is intact we should be getting that channel breakout tomorrow. Since it is a monthly expiry a bit of volatility cannot be ruled out as well.