06 Feb ’24 — Head and Shoulders Inverse forming on BankNifty?
BankNifty Analysis - Stance Neutral ➡️
Is BankNifty bearish? - absolutely not. Is it bullish? It's too early to say. One thing is sure - there is some weakness impacting the banks. Are the unsecured loans haunting them? None of the balance sheets from the quarterly results are bleeding - but something is still bothering them. Today was a fine day for the banks to support Nifty’s rally - still, the banks decided to stay on the bench.
4mts chart
One thing is sure, the fall looks like arrested (for now). If Nifty takes out the ATH without the support of the banks again, then it is some indication that the Information Technology players may have taken over as the new torch-bearers. There are exactly 6 NiftyIT companies in Nifty50 as there are 6 banks in BankNifty. NiftyIT weight is 14.18% vs 33% of BankNifty - definitely, BN has lost some ground and IT has gobbled it.
63mts chart
The perfect Inverse Head and Shoulders pattern has not formed yet - we still have 20% of the move remaining. We will closely monitor if BN chooses to follow this path as it is a bullish sign. The first clue came in when BN defended its support at 44542, the 2nd came when 45399 was defended. Tomorrow is the weekly expiry and we hope to see some actions - at present, the OTM strikes are not that juicy - if BN decides to move, we could expect some mispricings to pop in.
Algo Trading
Our BankNifty algo trades ended today with a gain of Rs8121.
Is BankNifty bearish? - absolutely not. Is it bullish? It's too early to say. One thing is sure - there is some weakness impacting the banks. Are the unsecured loans haunting them? None of the balance sheets from the quarterly results are bleeding - but something is still bothering them. Today was a fine day for the banks to support Nifty’s rally - still, the banks decided to stay on the bench.
4mts chart
One thing is sure, the fall looks like arrested (for now). If Nifty takes out the ATH without the support of the banks again, then it is some indication that the Information Technology players may have taken over as the new torch-bearers. There are exactly 6 NiftyIT companies in Nifty50 as there are 6 banks in BankNifty. NiftyIT weight is 14.18% vs 33% of BankNifty - definitely, BN has lost some ground and IT has gobbled it.
63mts chart
The perfect Inverse Head and Shoulders pattern has not formed yet - we still have 20% of the move remaining. We will closely monitor if BN chooses to follow this path as it is a bullish sign. The first clue came in when BN defended its support at 44542, the 2nd came when 45399 was defended. Tomorrow is the weekly expiry and we hope to see some actions - at present, the OTM strikes are not that juicy - if BN decides to move, we could expect some mispricings to pop in.
Algo Trading
Our BankNifty algo trades ended today with a gain of Rs8121.
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