Nifty & BankNifty Analysis — 02 May 2024 — Both indices held onto their ground, BN is not bearish—…
Nifty Analysis — Stance Bullish⬆️
Recap from yesterday: “The 63mts TF paints another picture, a perfect triple top at the 22780 levels. A double top between 9th and 10th April and the third top today on 30th April.”
Nifty opened quite strongly, immediately recouping some of the lost ground in the last session. After cutting almost 50% of the losses, N50 found a stable level and then maintained its narrow range.
Fearful of stop loss hunting, I squared off the Algo straddles at 13.16 and in hindsight, it proved to be a stupid decision. Although I made 18732 INR, another 23200 was forgone. I do not know about the Jane Street Algo strategies, but it has really elevated the premiums in near ATM strikes. In a way, it is good for option-selling as risk:reward is increasing especially on the expiry day.
For tomorrow, we wish to maintain the bullish stance, but the first test would be the ATH which would otherwise act as a triple top. The moment we get past that, I could remove the M pattern drawn for the period 05 to 12th April.
BankNifty Analysis — Stance Bullish⬆️
BankNifty’s pattern is quite interesting, unlike N50, it did not even attempt to recoup the losses in the last hour of the previous session. It is too early to comment if it is bearishness as the charts do not say so. But the way a few banks dropped today was quite worrying. Despite that, BN did not cede ground — quite surprising on how the other banks came to stabilize the index after Kotak took the beating.
On the 63mts TF, BN looks bullish still — but the obvious thing it had to do was to retrace at least 50% of the RED candle @ 14.30 yesterday. The run up so far has been more than expected, so taking a pause or even giving up some gains is not bad at all. We wish to start the day with a bullish tone and then go neutral if 48934 is getting breached.
Algos made only 859 INR today.
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