8th Dec ’23 — RBI’s meet clears the air for banks — PostMortem on Nifty & BankNifty
Nifty Analysis
4mts chart link — click here
Nifty had a gap-up opening and because of that, it defended the ground. There were 2 instances of a possible breakdown appearing. See the chart, almost a M like pattern and we hit the intraday low by 13.47. From there we reversed pretty quickly to end the day with net gains of 0.33%.
Firstly, we hit the 21000 milestone, the new ATH being 21006. We hit it twice at 09.59 and 10.31 — what a week it has been. RBI’s meeting today turned out to be business as expected (we will discuss this in detail in BankNifty’s postmortem). But the 142pts ~ 0.68% intraday fall was not attributed to the RBI’s decision or comments. But one thing is sure, the recovery from 13.51 was mainly by the Financial services & bank index.
63mts chart link — click here
On the 63mts TF, The uptrend stays intact. BankNifty has resolved the directional doubt on the upside which may impart more strength to Nifty next week. How high can we go — I am not sure. I wish to continue with my bullish stance till proven wrong.
BankNifty Analysis
Banks had a totally different chart pattern than Nifty50 today. I would say the pattern by BankNifty was more mature and stable compared with Nifty. At no point in time, a breakdown was visible in BN today — yes, we dropped 0.67% ~ 316pts in between, but it was not as scary as N50.
4mts chart link — click here
RBI Governor maintained status-quo today, A few of the important points from his meeting today — source1, source2
- Repo rate at 6.5% — unchanged
- Withdrawal of accommodation stance — unchanged
- CPI inflation fell by 2% after the last MPC meet
- Real GDP for 2023–24 projected at 7%
- Connected lending framework — work in progress
- UPI limit enhanced
- Set up a Fintech Repository
Remember how the banks were shy on 6th and 7th of December? The air is now clear for them — there are no hidden surprises from RBI this time. This could be one of the reasons we had an intraday bounce of 449pts ~ 0.96% after 1pm today.
63mts chart link — click here
For the last 2 days, I was neutral on Banknifty — after the clarity shown today, I wish to change my stance back to bullish. The new ATH is now 47303.65. Would like to see some action by banks in the next week.