The strong rally of BANKNIFTY culminated in a Head & Shoulders reversal pattern from 25200 levels in hourly time frame. Now after the 600 point correction BANKNIFTY seems to be coiling into a symmetrical triangle which if broken on the downside would take BANKNIFTY to 23600 levels in the short term.
On the fundamental front the first Consumer Price Inflation , Wholesale Price Inflation numbers post Goods & Service Tax implementation seems to be inflationary in nature. With RBI inching towards end of rate cut cycle, the gains from the Bond Books of the banks would be limited. Adding to it, the lack in credit growth would keep sustained pressure on banks NIM's. The fundamental factors seems to indicate that a firm top is in place for BANKNIFTY in the short term of next 1-2 quarters. Also, the weekly timeframe of BANKNIFTY seems to have formed EVENING STAR, a 3 candle reversal pattern.
Thus from a positional perspective any bounce back towards 25000 can be used to initiate positional shorts with stop above 25500 on a closing basis.
On the fundamental front the first Consumer Price Inflation , Wholesale Price Inflation numbers post Goods & Service Tax implementation seems to be inflationary in nature. With RBI inching towards end of rate cut cycle, the gains from the Bond Books of the banks would be limited. Adding to it, the lack in credit growth would keep sustained pressure on banks NIM's. The fundamental factors seems to indicate that a firm top is in place for BANKNIFTY in the short term of next 1-2 quarters. Also, the weekly timeframe of BANKNIFTY seems to have formed EVENING STAR, a 3 candle reversal pattern.
Thus from a positional perspective any bounce back towards 25000 can be used to initiate positional shorts with stop above 25500 on a closing basis.