08 Sep ’23 Post Mortem on Nifty + discontinuation of I-CRR news
Nifty Analysis
Recap from yesterday “On the 1hr TF the W pattern worked out quite good. The next 2 resistance points will be 19786 and 19852 if we are continuing the breakout rally. If we were to fall the first support will be the resistance we just broke i.e. 19678 followed by 19581. For tomorrow I wish to continue my bullish stance unless the first support of 19678 is taken out in the first 2 hours.”
Let the chart not deceive you, we really went up 142pts ~ 0.72% from the low to the high and today’s low was still above yesterday’s close. Since the chart was set to “Auto” resolution on “Log” scale - the up move may not look that much.
What an impressive rally today, I assume most of the analysts would have switched their bias to the long side after yesterday’s show. Today’s outperformance was quite predictable still the near ATM call options had a humongous price swing. Option premiums usually rise when the uncertainty goes up - and seeing the rally today the price jumps in 20100, 20200, 20300 & 20500 were more than unusual. 20100 CE which closed for 5.45 yesterday opened at 6.5 and rallied upto 13.5 ~ 248% before closing at 9.35.
We took out the first resistance point by 11.15 today and touched the 2nd resistance point by 14.15 to only close lower. The 2 resistance points are highlighted in orange horizontal lines.
I was feeling quite carried away that the technical analysis was working exactly as in the script. Nifty falling in a bearish channel from 21st July and then breaking out from 1st Sep. Just today I realized the real reason behind this is the I-CRR news flow - read here. Remember the fall started when the RBI Governor announced the 10% increment in CRR in his last MPC address. Now there is news that 75% of it might be removed immediately. This was the reason the banks started rallying all of a sudden from 2pm on 6th Sep. Do you recollect the article I wrote about HDFCBK being the lone wolf fighting for banknifty?
Now you might have understood how a 41% weightage on BankNifty can make a lot of difference.
For Monday I wish to change the status from bullish to 50% bullish & 50% neutral - that's because I would like to wait for this news flow to get priced in. The euphoria and FOMO alone should drive Nifty50 to new ATHs, however I do not wish to get into new bullish positions till then.
Recap from yesterday “On the 1hr TF the W pattern worked out quite good. The next 2 resistance points will be 19786 and 19852 if we are continuing the breakout rally. If we were to fall the first support will be the resistance we just broke i.e. 19678 followed by 19581. For tomorrow I wish to continue my bullish stance unless the first support of 19678 is taken out in the first 2 hours.”
Let the chart not deceive you, we really went up 142pts ~ 0.72% from the low to the high and today’s low was still above yesterday’s close. Since the chart was set to “Auto” resolution on “Log” scale - the up move may not look that much.
What an impressive rally today, I assume most of the analysts would have switched their bias to the long side after yesterday’s show. Today’s outperformance was quite predictable still the near ATM call options had a humongous price swing. Option premiums usually rise when the uncertainty goes up - and seeing the rally today the price jumps in 20100, 20200, 20300 & 20500 were more than unusual. 20100 CE which closed for 5.45 yesterday opened at 6.5 and rallied upto 13.5 ~ 248% before closing at 9.35.
We took out the first resistance point by 11.15 today and touched the 2nd resistance point by 14.15 to only close lower. The 2 resistance points are highlighted in orange horizontal lines.
I was feeling quite carried away that the technical analysis was working exactly as in the script. Nifty falling in a bearish channel from 21st July and then breaking out from 1st Sep. Just today I realized the real reason behind this is the I-CRR news flow - read here. Remember the fall started when the RBI Governor announced the 10% increment in CRR in his last MPC address. Now there is news that 75% of it might be removed immediately. This was the reason the banks started rallying all of a sudden from 2pm on 6th Sep. Do you recollect the article I wrote about HDFCBK being the lone wolf fighting for banknifty?
Now you might have understood how a 41% weightage on BankNifty can make a lot of difference.
For Monday I wish to change the status from bullish to 50% bullish & 50% neutral - that's because I would like to wait for this news flow to get priced in. The euphoria and FOMO alone should drive Nifty50 to new ATHs, however I do not wish to get into new bullish positions till then.
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