26th Dec ’23 — Positive Day with a rising VIX — PostMortem on Nifty & BankNifty
Nifty Analysis
4mts chart link — click here
Seems like I got the bet wrong, despite weakening geopolitical events — Nifty traded in the positive territory today. Only in the opening 15mts or so we saw a slight tendency to go below water but it was quickly bought into. Nifty rallied 146pts ~ 0.69pts from the LOD to HOD by 12.23.
NiftyIT 4mts charts — click here
Once it hit the intraday high, the steam eased off and then we started going sideways. NiftyIT has been such a decisive factor for Nifty50 these days. It lost almost 382pts ~ 1.07% and then recovered 492pts ~ 1.4% all in the opening 90mts. The final close was in the RED though (-0.41%).
63mts chart link — click here
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. Since it’s a holiday week — the FII action may be at a reduced space. Lower liquidity could bring in unusual price spikes — it is best suggested to take your trades with caution.
BankNifty Analysis
Was quite surprised to see BankNifty following the ascending channel’s bottom trendline with a near correlation. Only for a brief period, we traded in RED, once BN pulled itself above water — it was able to hold its level quite strongly.
4mts chart link — click here
KOTAKBANK, AXISBANK, and HDFCBANK were trading in green giving BN a much-needed green cushion. Even then there was no strong bullish momentum today — it was just that the bears did not have any control today.
63mts chart link — click here
On the higher timeframe, BN is still inside the ascending channel. The bears are unable to exert any pressure post 20th December. Since BN is not ceding ground, I have to change my status from bearish to neutral for tomorrow. This week BankNifty and Nifty are expiring together on Thursday, which means we have no instruments expiring tomorrow 27th Dec.
India VIX rose 7.08% today almost touching the 15 levels. Looks like VIX is creating an interim bottom. My EMA’s will show a golden crossover in 2 days if we continue the rising trend. After the news broke out about the drone attack on 2 vessels carrying Indian nationals — I seriously thought we would have a negative reaction today. Seems like the markets were not at all bothered. My next question is, will the market react to this news tomorrow? — “blast outside the Israel embassy in Delhi”
VIX 1D chart — click here