Nifty & BankNifty Analysis — 07 May 2024 — Going short as 22295 violated — PostMortem Series Q1…
Nifty Analysis — Stance Bearish⬇️
Recap from yesterday: “Our markets not rallying as against the recovery in US markets — speculating something to do with the re-election and taxation. Since I do not have any data points, will wait for more clarity.”
After having an inline opening, Nifty50 started falling quite aggressively. Without a real struggle, 22295 was taken out in the first attempt itself. By 11.39 we fell almost 269pts ~ 1.2% and that too without any retracement. The moment the support was breached, we had to revise our stance from neutral to bearish.
Unfortunately, we did not have further bearishness today, and by going short it may appear that we did not get any benefits today. Normally when critical support is broken, it means we should have further follow up action shortly. Also in the 63mts TF we did not really break it, if you are a conservative trader, it is a good idea to wait for one full candle to form below 22295.
When you look at the higher time frame, N50 trading between 22295 and 22051 is detrimental to the inverse H&S formed between 14th to 26th March. If the next support of 22051 is broken, then we might even have to remove that candlesticks pattern.
Despite a sharp move today, N50 algos made 10417 INR today thanks to the India VIX that rose to 17% levels.
BankNifty Analysis — Stance Bearish⬇️
BankNifty also fell in a single legged manner right from the open till 11.35. The fall totally unchecked by the Bulls and in a way came as a surprise as the BTFD people usually do not let the markets fall in this fast and furious manner.
BN showed more weakness than N50, partly because NiftyIT was in great GREEN shape today. At a specific point, BN was down 1% and NiftyIT was up 0.9% — a stark contrast.
BN ended up breaking the 48661 levels we discussed yesterday and hence we changed the stance from neutral to bearish. The next level to watch out for is 48115 and then the critical support comes at 47465. Since global markets are staying green, the FII selling in our markets could be related to political uncertainty due to the ongoing elections.
BN algos ended the day with gains of 12741 INR. The bulk of the gains started coming in only after 11.39.
Intraday Algos run via AlgoTest on Kotak
Webhooks automation run via TradingView on Dhan
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