28 Feb ’24 — Nifty takes out 22051 support, quite unexpected ➡️
Nifty Analysis - Stance Neutral ➡️
Recap from yesterday: “They need to take out the 22051 and 21913 support levels, which is only possible if we have a macro level bad news. Banks are the only sector that could give away such an opportunity. Already the FIIs are not so happy with the future prospects of the financial sector in India. A small trigger could set the ball rolling and before long it could become an avalanche.”
4mts chart
Nifty did fall today and the trigger was a news/event. AMFI issued a circular to all the Trustees to “protect the interest of investors of small-cap and mid-cap schemes”. And then gave a 21 day window to disclose this instruction on the respective websites. Ideally, this shouldn't impact the large-cap companies, but since it did - we may have to reassess the total risk to SIP inflows and outflows.
Coming back to technicals, Nifty50 fell 314 points today ~ 1.42%. The first pause Nifty50 had today was at the 22051 support level, from 10.59 to 14.15 this level was at play. Even though we got the 2nd leg of fall from 12.51 to 13.11 - the pullback ensured we retraced up to the 22051 erstwhile resistance. And guess what, Nifty had its next halt right at the 21913 support level. Literally saved by the bell.
On the higher timeframe, today’s move negates the flag pattern and instead, we have a double top (M pattern). Since this M pattern’s both legs are sitting at 21913 - the priority should be higher than the bullish flag set earlier. If Nifty50 had broken the 21913 today, we would have changed the stance from bullish to bearish right away. Hence we are going with a neutral stance tomorrow and would immediately go bearish if we have a gap down opening or sustained trades below the 21913 after the opening hour. Since we have the monthly expiry tomorrow - there is no better day to go bearish. The options premium will go up and it should be an option sellers day tomorrow.
63mts chart
Recap from yesterday: “They need to take out the 22051 and 21913 support levels, which is only possible if we have a macro level bad news. Banks are the only sector that could give away such an opportunity. Already the FIIs are not so happy with the future prospects of the financial sector in India. A small trigger could set the ball rolling and before long it could become an avalanche.”
4mts chart
Nifty did fall today and the trigger was a news/event. AMFI issued a circular to all the Trustees to “protect the interest of investors of small-cap and mid-cap schemes”. And then gave a 21 day window to disclose this instruction on the respective websites. Ideally, this shouldn't impact the large-cap companies, but since it did - we may have to reassess the total risk to SIP inflows and outflows.
Coming back to technicals, Nifty50 fell 314 points today ~ 1.42%. The first pause Nifty50 had today was at the 22051 support level, from 10.59 to 14.15 this level was at play. Even though we got the 2nd leg of fall from 12.51 to 13.11 - the pullback ensured we retraced up to the 22051 erstwhile resistance. And guess what, Nifty had its next halt right at the 21913 support level. Literally saved by the bell.
On the higher timeframe, today’s move negates the flag pattern and instead, we have a double top (M pattern). Since this M pattern’s both legs are sitting at 21913 - the priority should be higher than the bullish flag set earlier. If Nifty50 had broken the 21913 today, we would have changed the stance from bullish to bearish right away. Hence we are going with a neutral stance tomorrow and would immediately go bearish if we have a gap down opening or sustained trades below the 21913 after the opening hour. Since we have the monthly expiry tomorrow - there is no better day to go bearish. The options premium will go up and it should be an option sellers day tomorrow.
63mts chart
