8th Nov ’23 — Nifty hits the resistance, Going Neutral — PostMortem on Nifty & BankNifty
Nifty Analysis
Recap from yesterday: “For tomorrow, I wish to change my stance to neutral if 19446 is not getting broken in the opening 2 hours. I would love to go bearish if 19310 support is broken”
The encircled areas on the chart represent the period when 19446 resistance was in play. The open was right at that zone, then we spent 09.55 to 10.25 around those levels. We took a minor dip, but nothing impressive to retest the 19310 levels.
Then we picked up some momentum and went past the 19446 resistance by 13.10 only to be pulled back by 14.15. Then we hovered around those levels again in the last 30mts only to close marginally below.
There are 2 ways to look at things now.
- Either the retracement from 26th Oct has stalled and a lower high is getting formed, wherein further moves will be downside
- Nifty is just taking a pause to catch its breath and further propel upside.
Unfortunately, I am unable to comment with confidence on the direction right away.
In line with yesterday’s research, I have changed my stance from bullish to neutral. To go long not only Nifty has to break through the 19446 barrier but trade above 19561 levels. Whereas to go short, a break below 19310 would be enough.
BankNifty Weekly Expiry Analysis
Between the last expiry and today, BankNifty gained an impressive 909pts ~ 2.13%. It broke through 3 resistance lines to give some hope to the bulls. If we talk about the expiry day today, the OTM premiums were horrible today. Due to the collapse of implied volatility — the market participants were not anticipating any movements. Today is one rare day when I decided not to sell any PUT options. I felt its better not to sell than sell cheap. CALL options on the other hand had better premiums after the opening hour.
BankNifty Today Analysis
We almost hit the 43800 levels in the opening candle, but there was some difference in the price action if we compare it with Nifty. Although both Nifty and BankNifty fell till 11.15, Nifty managed to climb back whereas BankNifty lost the momentum. The tiredness of the bulls was more prominent in BN. I usually take BankNifty’s price action as a leading indicator during trend reversals.
Seems like I need to draw a new support/resistance line at 43566, because we stopped and reversed twice at that zone. I never had that level marked in my chart before. I have highlighted the 4 recent instances in blue color.
Looking at the hourly chart, I have decided to change my stance from bullish to neutral. The only way to change back to bullish is to break the 44063 levels. Whereas to go bearish, BankNifty will have to break at least 4 supports and trade below 43012. So until then, I wish to stay neutral.