Fed Rate Cut and Impact on India's Bond Yields, INR and EquitiesThis video gives an overview of how Indian economy performed during the post covid era, vis-a-vis other countries and using that performance as a benchmark, it explains that as US starts to cut rates, how Indian economy, bonds, currency and equities will likely perform
Algo
ALGO MARKET ANALYSIS Currently #ALGO is just above the multi month support after touching amid market crash around the world. Market sentiments are highly bearish but market always recovers. Main support lyes at 0.084 zone and resistance are lying at 0.1250, 0.1650, 0.23 level. Firstly it needs to maintain some momentum and it needs to clear 0.1250 level. If Algo falls below 0.09 level then above analysis gets invalid.
19 Jul 2024 - 5 swings on 18th, lower volatile day today vs N50BankNifty Stance Neutral ➡️
Last week we published a report stating our neutral stance, and that held up quite well as we stayed range bound this week. Technically we lost 0.23% ~ 119pts to end the week at 52221.
NiftyIT was the main reason N50 swung up and down this week, esp on the 18th. BankNifty was not spared either, we had 5 swings that particular day and anyone who ran a non-directional straddle would have faced the heat. Luckily my algos went into some technical error & I got stopped out by 09.52 with a minor loss.
We dropped 231pts ~ 0.44% in the first 4 minutes, then rose 502pts ~ 0.96% by 10.11, then fell by 484pts ~ 0.92% by 11.31. Then we had a super rally of 595pts ~ 1.14% till 14.27. From this peak, we fell 226pts ~ 0.43% till close. It makes me believe such intensity of madness usually appears at TOPS.
BN was quite decent today, we fell only 0.67% today compared to 1.095 on N50, but we do not have enough clues to go short yet. We would like to begin the next week with a neutral stance and then take it up from there.
The budget is on Jul 23 and the volatility will definitely go up on Monday, I have not decided whether to run the algos on Monday & Tuesday or not.
08 May 2024 - Banks and IT were in RED, but Nifty closed flatBankNifty Analysis - Stance Bearish⬇️
BN was unable to defend the 48115 support resistance today and it was an advantage Bears. The overall price action was neutral and that might be related to the expiry trades. There were a couple of instances where BN moved 100+ pts in minutes - this really had an impact on the algo trades, but happy that major damage was not done.
Both BN and NiftyIT closed the day in the RED, whereas Nifty50 ended the day flat. If IT is also going the banks' way, we might have further downsides.
For tomorrow, I wish to hold on to the Bearish view and then go neutral if we spend considerable time above 48101.
The algos did pretty well today and ended up generating a whopping profit of 54085 INR.
07 May 2024 - BankNifty stance changed to Bearish, more cuts ???BankNifty Analysis - Stance Bearish⬇️
BankNifty also fell in a single legged manner right from the open till 11.35. The fall totally unchecked by the Bulls and in a way came as a surprise as the BTFD people usually do not let the markets fall in this fast and furious manner.
BN showed more weakness than N50, partly because NiftyIT was in great GREEN shape today. At a specific point, BN was down 1% and NiftyIT was up 0.9% - a stark contrast.
BN ended up breaking the 48661 levels we discussed yesterday and hence we changed the stance from neutral to bearish. The next level to watch out for is 48115 and then the critical support comes at 47465. Since global markets are staying green, the FII selling in our markets could be related to political uncertainty due to the ongoing elections.
BN algos ended the day with gains of 12741 INR. The bulk of the gains started coming in only after 11.39.
07 May 2024 - Going short on Nifty50 as 22295 violated, 🐻🐻🐻Nifty Analysis - Stance Bearish⬇️
Recap from yesterday: "Our markets not rallying as against the recovery in US markets - speculating something to do with the re-election and taxation. Since I do not have any data points, will wait for more clarity."
After having an inline opening, Nifty50 started falling quite aggressively. Without a real struggle, 22295 was taken out in the first attempt itself. By 11.39 we fell almost 269pts ~ 1.2% and that too without any retracement. The moment the support was breached, we had to revise our stance from neutral to bearish.
Unfortunately, we did not have further bearishness today, and by going short it may appear that we did not get any benefits today. Normally when critical support is broken, it means we should have further follow up action shortly. Also in the 63mts TF we did not really break it, if you are a conservative trader, it is a good idea to wait for one full candle to form below 22295.
When you look at the higher time frame, N50 trading between 22295 and 22051 is detrimental to the inverse H&S formed between 14th to 26th March. If the next support of 22051 is broken, then we might even have to remove that candlesticks pattern.
Despite a sharp move today, N50 algos made 10417 INR today thanks to the India VIX that rose to 17% levels.
29 Apr 2024 - BankNifty hits a new ATH, becomes torch bearer...BankNifty Analysis - Stance Bullish⬆️
We were quite sure BN would be bullish today but honestly did not think we would gain 1223 points ~ 2.54% in total. ICICI Bank had good quarterly results, but the outperformance was unexpected, that really fuelled the rally today.
Can you believe, BN overshadowed NiftyIT, reclaimed the torchbearer status, and then hit a new ATH of 49473.6 today? NiftyIT is almost 13% down from its ATH, whereas BN is looking strong and roaring.
The main reason, Nifty went up 1% was attributed to the outperformance in the banks, otherwise it would have ended the day flat. Honestly, there weren't any good news for Nifty to rally, unlike Banks which had good quarterly results impact.
All 6 candles are in green today and all of them are with long bodies, such a treat to the eyes. Let us wait and watch how the expiry will play out tomorrow. My non-directional algo hit a loss of -83618 INR today, quite expected as the index went directional today.
25 Apr 2024– BankNifty goes bullish, ATH a swing away 🐂🐂🐂BankNifty Analysis - Stance Bullish ⬆️
BN also gets a stance upgrade to bullish, the momentum that was lacking till now came from sources we never knew existed. Kotakbank has a stunning 9.11% weightage on BN index and despite it being 10% down, BN managed to rally 886pts ~ 1.86% intraday today.
BN managed to surpass the 48103 resistance which gave it the bullish tinge. The ATH of 49057 is surely a swing away, but let me take a moment and think rationally - can BN take out that level when Kotak has taken so much of a beating? Was what we saw today another round of short-covering, just because the weak hands who held the shorts were not convinced to push down the prices further?
Looking at the intraday rally, I was sure the algos would get messed up. BN algos went into error @ 10.55 and auto-squared off. At the moment the losses were approx. -12341. I managed to re-activate the same to end the day with losses of -38795, in hindsight not activating again would have been the better choice 😢.
25 Apr 2024– Nifty50 gets a stance upgrade, bullish! 🐂🐂🐂Nifty Analysis - Stance Bullish ⬆️
Recap from yesterday: "For tomorrow, we wish to maintain the neutral stance and look for bearish opportunities if 22295 is getting broken. If the index moves up, 22519 would be our first level to watch for."
Kotak Bank started the day with cuts of -10% due to the RBI news impact from yesterday. The spillover effect was visible on all Nifty components prompting a gap down open. It was the consensus trade and we were all ready for it.
The first surprise came when we closed the gap by 09.43 even while Kotak was at -10%. The excess trade due to the short-covering bounce was visible between 10.19 to 10.51.
The second surprise came when Nifty started rallying from 22400 levels to 22625 between 12.59 to 14.35. This is the 2nd expiry in which Nifty has gone ballistic. I am not sure if it was SL hunting, but it messed up my Algo trades and had to close at a loss of Rs43092 on Nifty.
The 321pts intraday rally has ensured N50 gets a stance upgrade to Bullish with the next target being the ATH. If it takes out the ATH, then we can safely remove the double top pattern.
24 Apr 2024– Neutral and Out of steam, what is next? Nifty50Nifty Analysis - Stance Neutral ➡️
Recap from yesterday: "For tomorrow we wish to start the day with a neutral stance and look for bullish opportunities as soon as it reaches for the 22519 levels."
Another flat day, but the options premiums were not behaving as usual. The blame may be on VIX as the premiums were dead low that even a small 50+ points move created a huge skew between the Put and Call prices. India vix staying @ 10.2 levels is not a good sign for professional options traders as a small move will upset the premiums.
A better alternative is you use spreads like credit/debit spreads - buy a strike, sell strike+1 etc, so that the premiums move in tandem and the volatility contraction may not impact that much. But I assume most of the Algos may not have spreads as the core strategy, to begin with.
For tomorrow, we wish to maintain the neutral stance and look for bearish opportunities if 22295 is getting broken. If the index moves up, 22519 would be our first level to watch for.
Algos ended up gaining Rs5496 today.
3 Apr 24 Nifty50, VIX collapsing 20% means Advantage Bulls!Nifty Analysis - Stance Neutral ➡️
Recap from yesterday: "The 63mts time frame is not bullish yet, but we are not bearish now. The best we can think of right now is to go neutral. If we fall back below 22295 tomorrow, we might even go short."
Nifty was perfectly neutral today after the opening candle. Since RELIANCE declared its quarterly results yesterday, we expected profit bookings on that counter. The mega gap-up and then cooling off on N50 was much attributed to RELIANCE's price action. Once N50 found support at yesterday's close, it decoupled itself from both RELIANCE and HDFCBANK price action. N50 was in green even when both the stocks were in red, that is not something we see usually.
India VIX crashing almost 20% was another shocker for the Bears. Whenever we have dips, the Bears are unable to really punch a way through. The markets come back stronger than before and usually hit a newer top. A crashing VIX is advantage Bulls as it shows the uncertainty falling. For tomorrow we wish to start the day with a neutral stance and look for bullish opportunities as soon as it reaches for the 22519 levels.
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Nifty50 algos ended the day with profits of Rs12729 mostly due to the narrow range maintained by the index today.
23 Apr 24 - BankNifty, deadly opening candle & then flat dayBankNifty Analysis — Stance Neutral ➡️
BN had a flat day too but not after a deadly looking opening candle. If you look at the charts, it is more or less a replica of what happened yesterday. BN shows it is taking a breather after the recent run.
Not falling off from the current levels is an advantage Bulls. Just like we mentioned yesterday, 48103 is an interim resistance, but not a strong one. To take out the ATH, all we need is a slight push.
BankNifty Algos ended the day with gains of Rs16071, but not after taking some MTM losses in the earlier part of the day. Once BN started trading flat, the profits started coming in.
22 Apr - Nifty50 gets a stance change, not bearish - but neutralNifty Analysis - Stance Neutral ➡️
Recap from yesterday: "I strongly think it was an intense short covering that fueled this rally and hence does not wish to alter my bearish stance. If we get past 22295 on Monday or Tuesday, I would change the stance to neutral."
Nifty snaps out of bearishness by breaking the 22295 resistance. Even though we had an unusual gap-up, we ended up almost closing it by 09.47. However, the Bears were not able to drive down the prices further indicating a lack of conviction.
Nifty spent considerable time at the 22295 zone, visible from the blue encircled region before breaking out at 14.39. Just think about it, N50 came from 21777 to 22375 today in just 2 sessions, close to 600 points.
The 63mts time frame is not bullish yet, but we are not bearish now. The best we can think of right now is to go neutral. If we fall back below 22295 tomorrow, we might even go short. 22519 would be an interim resistance on the upside above which we would like to go long.
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Algo trading - ended up losing 6003 on N50 algo trades today.
19 Apr 2024 BankNifty all 6 candles in GREEN, 1093pts rallyBankNifty Analysis - Stance Bearish⬇️
BankNifty was more dramatic versus N50, it went ahead and rallied 1093pts ~ 2.35% and ended up taking out the crucial resistance of 47465. The momentum favors a stance change to neutral, but I would like to wait for one more day for confirmation.
The lowest point of the day was hit in the opening candle and the highest point in the last candle - so much drama. And never in the rally today there was an attempt to break the upward direction. Unlike N50, hard to believe that it was short covering here - it looks like more of a long build-up.
Again luckily did not switch on the Algos today, or else would have lost approximately 60k. 46284 support level was added today, but BN took support at 46592 levels itself. All 6 candles were in GREEN today - unbelievable momentum.
19 Apr 2024– Nifty Unseen 402pts momentum, not bullish thoughNifty Analysis - Stance Bearish⬇️
Recap from yesterday: On the higher TF, we wish to maintain the bearish stance even though we did not get a 63mts closing candle below 22051. I am hoping that we may get one in the forenoon session tomorrow.
Unseen momentum on Nifty50 today, we woke up to the bad news that Israel has launched counter strike on Iran, and Gifty (Global Nifty futures) were trading 400 points lower. The news and Twitter feed were not looking good and immediately I felt it was wise not to run my non-directional algo. That proved to be the right decision as my backtests showed losses of 97000 if I had run the Algo.
Nifty opened below the support of 21913, hit an intraday low of 21777, and then started recovering. Between 11.27 to 12.11, N50 spent its time near the 21913 SR zone. Once it broke the resistance, it immediately went to the next SR of 22051. Between 12.51 to 13.47, N50 spent its time at 22051 before breaking out. N50 went ahead and hit an intraday high of 22179 before cooling off to close at 22149.
When was the last time you saw N50 rally 402pts that too from poor global macros? I strongly think it was an intense short covering that fueled this rally and hence does not wish to alter my bearish stance. If we get past 22295 on Monday or Tuesday, I would change the stance to neutral.
18 Apr - BankNifty Algos did well as it was not expiry todayBankNifty Analysis — Stance Bearish⬇️
“The power of a strong support/resistance zone will help you in your technical analysis” — Anonymous.
See what happened today, BN started strong and was keeping its head above the 47465 support for a long time. Between 10.19 to 10.31, there was an attempt to break this SR, but it failed. BN reclaimed the 47700 levels and was coasting perfectly when the flash crash happened. Between 13.23 to 13.27, BN gave away 557pts ~ 1.17% also ensuring the SR breach.
By 13.39, the breach was confirmed and BN continued its downward moves. A session low of 46982 was hit at 15.15 post which we had a 240+ pts recovery.
The last 4 candles on the 63mts TF are all red and the support of 47465 has yielded. I am yet to mark the next support level, which I will do by tomorrow. I wish to hold on to my bearish view for tomorrow as well.
The Algo on BN was in good shape till the 13.23 impact took away the gains. Ended the day with a loss of 40,724.
18 Apr Nifty –13.23 Candle wipes out the entire April ProfitsNifty Analysis - Stance Bearish⬇️
Recap from yesterday: "For bearish continuation, we need to take out the 22051, whereas for Neutral stance shift, we need to take out 22295."
We did take out the 22051 support today on the 4mts TF but not before some drama. Initially Nifty was showing strong upside potential knocking the 22295 resistance level. By 12.15, I almost thought we might have to go neutral and kiss good bye to the new Bears.
Fortunately, the 22295 resistance held its ground and proved a safe level for the Bears. Coming to the main event of the day - see the encircled portion. The 13.23 and 13.27 candles. Nifty fell 213 points in 8 minutes (might be a new record). And since we had an expiry today, what it actually did was mess up the premiums of straddles. I lost 1.38L in Nifty today due to this misadventure.
By 14.55 we lost the 22051 support and N50 went on to test 21961. The next major support comes at 21913.
On the higher TF, we wish to maintain the bearish stance even though we did not get a 63mts closing candle below 22051. I am hoping that we may get one in the forenoon session tomorrow. The last 3 candles were strong RED and the bodies fit right between the 22295 and 22051 SR zones.
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The losses in Algo trades were 1.38L, mostly due to slippages between 13.23 to 13.28. However smartly you set the programs, the orders will not fire as fast as the underlying moves. The delay is enough to get mispricings and slippages. Quite relieved to have saved close to 70k from the max loss value.
16 Apr - BankNifty takes support, 47465 crucial for trend conti.BankNifty Analysis - Stance Bearish⬇️
BN managed to hold on to 47465 levels quite decently. All intraday straddlers would have had a decent day as there were no swings or whipsaws. We opened below the 47465 level but managed to close above it giving some hope to the Bulls.
If we close above 47465 levels on the 18th, I might change my stance from bearish to neutral. For bearish continuation, we need strong downside momentum - agreed that we lost 288pts ~ 0.6% today, but not breaking the support level is considered a negation of the trend.
In the higher time frame, this is more obvious. See the closing 63mts candle, it is strong green with the lower part of the body right at the 47465 level. The next move would be more based on news than technical analysis, so it would even make sense to keep a close eye on macros like Iran-Israel conflict.
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BN algos ended the day with a profit of 26757, again exited prematurely in the opening 30mts itself as the time condition of the profits were met.
15 Apr 2024–22295 support is taken out, I am short ⬇️ Nifty50Nifty Analysis - Stance Bearish⬇️
Recap from yesterday: "On the higher time frame, we have a double top formation (M pattern). To negate the pattern we would have to take out the ATH, otherwise, it looks like a nice setup to go bearish. 22519 is a good interim support level, the main support comes only at 22295."
I personally did not punch any manual or non-directional Algo trades today. The only trades I took were the directional trend strategy. Since 22295 support is broken, my view has changed from neutral to bearish. If Nifty can give a close above 22295 then I might roll back my stance to neutral again.
The reason I did not place orders today was due to the assumption that the markets may behave irrationally today. VIX was very low, so a surge could offset the premiums in such a way that it could create unwanted slippage. Well, after backtesting with today's data, I felt it was a stupid idea to have waited on the sidelines and not played.
The M pattern assumes more meaning now on the 63mts TF. Ideally, we need one more red candle below 22295 for some bearish safety. 22051 is the next support level which could be taken out pretty easily if the shorts pick up momentum. I hope the BTFD takes some rest for few days so that the Bears can do their thing.
2 Apr– Nifty50 - 4 RED Candles, first real sign of reversal?Nifty Analysis - Stance Neutral ➡️️
Recap from yesterday: "As I write this article, SPX, NDQ, and DJI are down over 1.1%. A spillover effect is definite but because we have a holiday tomorrow, we might have another day of US stock market action left to react."
The first real sign of a breakdown. US CPI came in hot due to which the markets reacted pretty badly on Wednesday. Thursday the markets gained back some points, but I strongly think the fall in our markets had more to do with the "Iran - Israel" tensions than inflation.
The reason I am saying that is because after the gap-down open, we made a swing low but then recovered nicely from 09.43 to 12.07. From 12.07 to close we lost 192 points ~ 0.85%. We changed the stance from Bullish to Neutral as soon as 22689 levels were breached. Ideally, we should have changed the status to bearish as the afternoon momentum was quite good. The only reason we did not do that was to check if the reaction was a little too much, if we continue to maintain the same momentum on Monday - we will look out for bearish opportunities.
On the higher time frame, we have a double top formation (M pattern). To negate the pattern we would have to take out the ATH, otherwise, it looks like a nice setup to go bearish. 22519 is a good interim support level, the main support comes only at 22295.
I started Algo trading on Nifty50 today and ended the day with a gain of Rs9465. Exited prematurely at 09.44 as soon as the markets started to crack.
12 Apr - BankNifty was not that bearish, but a HH is formed.BankNifty Analysis - Stance Neutral ➡️️
BankNifty did not fall as much as Nifty50 today, we opened -244pts as gap-down, and the first candle itself was a strong green candle which gave the impression that the Bears may lose control.
The follow-up action was good enough and we retested the swing low by 09.47 giving some hope, but again the markets started recovering till 12.11. I was posting in our trader's chat group that if we stay like this the short covering will come in and we may end up going up and that is exactly when the 2nd round of selling came in. In the second leg, we lost another 311 points ~ 0.64%.
On the 63mts TF, BankNifty ended up creating the higher high. To know if the bullish trend is at threat or not - we should take out the support of 47465 soon, but that is around 1000pts away. We would like to start Monday with a neutral stance and then take it up from there.
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BankNifty Algo trades ended with a gain of Rs7735. Prematurely exited at 09.44 sensing the markets were beginning to crack.
10 Apr - The body of candles are getting shorter, end of bulls ?BankNifty Analysis - Stance Bullish ⬆️
Banknifty was looking strong right from the start. Unlike Nifty, BN did not have a huge gap up, but the rising trend was clear and strong. The reason it was strong was because the moves were not wild swings but slow & steady.
If you look at the 63mts candlesticks, you can notice the body becoming smaller. Usually, it is a sign of tiredness by the bulls as we are in an uptrend. We will get to know that on Friday, we wish to maintain our bullish stance till then.
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Algo Trading
Our Algos ended the day with a gain of Rs33351. I did not wait out the entire session and closed out the trades in advance expecting a wild move due to the US CPI news event.
09 Apr - BankNifty is structurally more Bullish than Nifty50BankNifty Analysis - Stance Bullish ⬆️
BankNifty does an inverted V pattern today due to which the Algos went negative. Was quite happy that the losses were contained in the end, but what I learned is that sharp rises & falls take out the stop losses at both ends. And what is the end result? We are treading nowhere.
On the higher timeframe, BN looks more bullish than Nifty. Just like we discussed yesterday, only if we take a pause and retrace a few points - we can mark the higher high. Since the 11th is a holiday due to Ramadan, both Nifty and BankNifty will have the expiry tomorrow.
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Algo Trading
The trades ended today with a loss of -18294. There is no way the Algos can defend a V or an inverted V shape. The best I could do was firefight the same manually, but I decided otherwise.
