6th Dec ’23 - stance changed to neutral, RBI policy on Friday ?
BankNifty Today Analysis
BankNifty also had a gap up open, but the first-hour price action did not seem normal. Not just because we went underwater and traded negative for the rest of the day, but the lack of will by the banks to move up. We all know the RBI MPC started the meeting today and we will have the summary on Friday @ 10.00 AM.
5mts chart link - click here
Seems like the market is expecting something from the RBI Governor this time. The last time he came up with a CAR (Capital Adequacy Ratio) weight increment - the markets fell. Prior to that, we had the I-CRR incremental cash reserve ratio of 10%. I guess he is doing everything to control the liquidity without raising the repo rates. What will he do this time - increase the weight on SLR (statutory liquidity ratio), ask banks to keep more collateral with RBI ?
The next move by Banks will make or break Nifty, that is because to continue the breakout strategy we need strong momentum. We cannot have a situation where Nifty rockets with the BankNifty stalling.
63mts chart link - click here
The first 63mts candle of today is encircled, see the weight its body carries. There was a drop of 482pts ~ 1.02%. So even though we hit a new ATH today, this candle looks worrisome. I wish to change my stance to neutral from bullish for tomorrow. We will get 100% clarity only by Friday on what RBI Governor has in mind, till then it is better to take only high-conviction trades.
BankNifty also had a gap up open, but the first-hour price action did not seem normal. Not just because we went underwater and traded negative for the rest of the day, but the lack of will by the banks to move up. We all know the RBI MPC started the meeting today and we will have the summary on Friday @ 10.00 AM.
5mts chart link - click here
Seems like the market is expecting something from the RBI Governor this time. The last time he came up with a CAR (Capital Adequacy Ratio) weight increment - the markets fell. Prior to that, we had the I-CRR incremental cash reserve ratio of 10%. I guess he is doing everything to control the liquidity without raising the repo rates. What will he do this time - increase the weight on SLR (statutory liquidity ratio), ask banks to keep more collateral with RBI ?
The next move by Banks will make or break Nifty, that is because to continue the breakout strategy we need strong momentum. We cannot have a situation where Nifty rockets with the BankNifty stalling.
63mts chart link - click here
The first 63mts candle of today is encircled, see the weight its body carries. There was a drop of 482pts ~ 1.02%. So even though we hit a new ATH today, this candle looks worrisome. I wish to change my stance to neutral from bullish for tomorrow. We will get 100% clarity only by Friday on what RBI Governor has in mind, till then it is better to take only high-conviction trades.
