PostMortem on BankNifty Today & Analysis of 08 JUN 2023
A good day to take out the support zone of 44068 - was it an over-reaction to the RBI rate decision today? Lets analyze.
RBI MPC decided to keep the repo rates unchanged at 6.5% and continue its withdrawal of accommodative stance. Logically no major changes w.r.t last policy day.
Handful of participants including me were expecting RBI to hike the rates so that the nail on the inflation coffin can be hit. The reluctance to hike rates and just a 10bps cut on the next fiscal inflation has lot of meaning. for FY23–24 inflation target has been revised to 5.1% from 5.2% - what this really means is the inflation is not going to come down even in the next year.
And not hiking the rates will add oil to the fire. Had there been a rate hike, we could have assumed a steeper inflation fall trajectory & then a rate decrease to boost demand. As it stands RBI will have its hands tied next fiscal also not to cut the rates as inflation is only expected to come down 0.1%.
And also election is around the corner, unless the Govt. slash the fuel rates - the perceived goods price hike will only keep going up. The central bank has decided to have a bleak looking tomorrow for the comfort of today.
More worries will add up when the Rs2000 currency notes comes back to the banking system. Monetary assets will again appreciate in value with no real perceived changes.
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Banknifty weekly analysis
Over the last week 01 Jun to 08 Jun, banknifty has fallen on 0.32% ~ 140pts. Its not really too much, imagine we fell 530pts from the HOD to LOD today. So on a weekly basis banknifty is still continuing to exhibit stability.
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Today's analysis
We had an inline start and then a rally of 249pts till 10.55. RBI Governor speech was from 10.00 AM - so the initial market reaction was positive - but there was no outperformance.
Nifty50's chart showed more meaning today, because the reversal came right at the resistance level for it. Since banknifty has no more resistances - it was tougher to trade today.
In fact it was Nifty50 which started falling first and then the banknifty caught up to it. NiftyIT was weak early in the day itself.
In total banknifty fell 533pts from the HOD to LOD breaking the support of 44068 on its way. There was a recovery from 13.40 to 13.55 which lured me to close the PUT position (that went jackpot).
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15mts TF - things were looking flavorless until the support break came today. The chart is still emotionless - there is no threat of bearishness if 43600 is not taken out tomorrow.
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1hr TF has brought back the importance to the 44068 SR zone. There has been multiple touch-and-go instances in the recent past. Still we need a close below 43253 till we have a change in bias
to view all 6 charts of today, visit viswaram. com
RBI MPC decided to keep the repo rates unchanged at 6.5% and continue its withdrawal of accommodative stance. Logically no major changes w.r.t last policy day.
Handful of participants including me were expecting RBI to hike the rates so that the nail on the inflation coffin can be hit. The reluctance to hike rates and just a 10bps cut on the next fiscal inflation has lot of meaning. for FY23–24 inflation target has been revised to 5.1% from 5.2% - what this really means is the inflation is not going to come down even in the next year.
And not hiking the rates will add oil to the fire. Had there been a rate hike, we could have assumed a steeper inflation fall trajectory & then a rate decrease to boost demand. As it stands RBI will have its hands tied next fiscal also not to cut the rates as inflation is only expected to come down 0.1%.
And also election is around the corner, unless the Govt. slash the fuel rates - the perceived goods price hike will only keep going up. The central bank has decided to have a bleak looking tomorrow for the comfort of today.
More worries will add up when the Rs2000 currency notes comes back to the banking system. Monetary assets will again appreciate in value with no real perceived changes.
---
Banknifty weekly analysis
Over the last week 01 Jun to 08 Jun, banknifty has fallen on 0.32% ~ 140pts. Its not really too much, imagine we fell 530pts from the HOD to LOD today. So on a weekly basis banknifty is still continuing to exhibit stability.
---
Today's analysis
We had an inline start and then a rally of 249pts till 10.55. RBI Governor speech was from 10.00 AM - so the initial market reaction was positive - but there was no outperformance.
Nifty50's chart showed more meaning today, because the reversal came right at the resistance level for it. Since banknifty has no more resistances - it was tougher to trade today.
In fact it was Nifty50 which started falling first and then the banknifty caught up to it. NiftyIT was weak early in the day itself.
In total banknifty fell 533pts from the HOD to LOD breaking the support of 44068 on its way. There was a recovery from 13.40 to 13.55 which lured me to close the PUT position (that went jackpot).
---
15mts TF - things were looking flavorless until the support break came today. The chart is still emotionless - there is no threat of bearishness if 43600 is not taken out tomorrow.
---
1hr TF has brought back the importance to the 44068 SR zone. There has been multiple touch-and-go instances in the recent past. Still we need a close below 43253 till we have a change in bias
to view all 6 charts of today, visit viswaram. com
