22 Sep ’23 Post Mortem on BankNifty - Target 1 - 44451

NSE:BANKNIFTY   Nifty Bank Index
BankNifty Analysis

BankNifty was trying to recover from the fall yesterday and it got lucky with 2 news events. Firstly JP Morgan announced its adding India to its Emerging markets bond index - source. Catch the discussion in Trading QNA.

Secondly the news broke out that Govt’s commentary that I-CRR withdrawal will give ample liquidity with the banks - source

Both the news gave some thrust to Banknifty and thereby Nifty in the forenoon session and helped it avoid a big fall (according to me). BN rallied exactly 1% from the lows hit at 10.00 to a comfortable position by 12.05.

Both the news logically does not make sense for the bank nifty to rally. India’s bond markets meaning GOI bonds are serviced by RBI and the banks may choose to serve its debt - but not directly. Secondly the I-CRR withdrawal news was made on 1st Sep and the ATH hit by Nifty50 was due to this (Please refer to the post-mortems from 01 Sep to 15 Sep for more details).

My targets for BankNifty did not work out today, but I am still continuing the bearish stance for Monday. The first target being 44451 and the second - 44219. In case BankNifty is not breaking the current low in the opening 2 hours - I would prefer to change my stance to neutral.


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