16 Feb ’24 — Nifty stance upgraded to Bullish, BN Neutral
Nifty Analysis - Stance Bullish ⬆️
Recap from yesterday: “A gap-up is ideal as it will quickly tip the balance to the Bulls as short sellers will have to run for cover. We wish to change the status from neutral to bullish only if we get a 63mts candle above the 21913 resistance line.”
4mts chart
We all knew it would be a gap-up today and see how the bears ran for cover when we opened 93 points ~ 0.43% above yesterday’s close. The spike in CALL premiums was enough to show the fear of short covering. Secondly, there was no attempt to close the gap - which would have left the Bears with no choice but to abandon their short position or roll over to the next week and find a similarly priced strike. Fortunately, most would not have made a heavy loss as the “real breakout” did not happen today. Nifty was just contented to hold the ground and not concede the territory.
After the first 63-minute candle we revised our stance to bullish, if you have read our last few reports - you would understand the rationale too. See the island formed above the resistance level of 21913. It is a classic breakout formation. From 15th Dec 2023 to 15th Feb 2024 - Nifty was in a narrow range of 21491 to 21913 with a couple of false breakouts/breakdowns. So we are keeping our fingers crossed this time to validate whether it works out. One way to do that is to check for follow-through price action. Blips do not last that long and we usually fall below the resistance (just like what happened on the last 2 occasions). Today is the first time I guess Nifty made the move ahead of BankNifty for a direction change. BankNifty has a lot of headroom left and if it catches up to its ATH - the impact on Nifty is going to be more than awesome.
63mts candle
Recap from yesterday: “A gap-up is ideal as it will quickly tip the balance to the Bulls as short sellers will have to run for cover. We wish to change the status from neutral to bullish only if we get a 63mts candle above the 21913 resistance line.”
4mts chart
We all knew it would be a gap-up today and see how the bears ran for cover when we opened 93 points ~ 0.43% above yesterday’s close. The spike in CALL premiums was enough to show the fear of short covering. Secondly, there was no attempt to close the gap - which would have left the Bears with no choice but to abandon their short position or roll over to the next week and find a similarly priced strike. Fortunately, most would not have made a heavy loss as the “real breakout” did not happen today. Nifty was just contented to hold the ground and not concede the territory.
After the first 63-minute candle we revised our stance to bullish, if you have read our last few reports - you would understand the rationale too. See the island formed above the resistance level of 21913. It is a classic breakout formation. From 15th Dec 2023 to 15th Feb 2024 - Nifty was in a narrow range of 21491 to 21913 with a couple of false breakouts/breakdowns. So we are keeping our fingers crossed this time to validate whether it works out. One way to do that is to check for follow-through price action. Blips do not last that long and we usually fall below the resistance (just like what happened on the last 2 occasions). Today is the first time I guess Nifty made the move ahead of BankNifty for a direction change. BankNifty has a lot of headroom left and if it catches up to its ATH - the impact on Nifty is going to be more than awesome.
63mts candle
