13 Mar ’24 — BankNifty stays cool today unlike N50 that broke 2.
BankNifty Analysis - Stance Neutral ➡️
BN was calm as a cucumber, on one side the Nifty50 heavyweights were tanking but BN kept its cool. Usually, Banks are the first to react to any news related to “froth”, “valuation” etc. Mainly because the valuation, loan against shares, etc all depend on the underwriters and financial institutions that did the due diligence. When the markets are going up, nobody is really worried. But when the stocks start crashing, the valuations get impacted and people start getting margin calls. When this situation is combined with a contracting money supply - businesses could face restrictions in raising new capital.
4mts chart
The only reason I can think of why the Banks did not fall today would be due to the expiry aspect. If that is the case, we should be seeing the FOMO effect in tomorrow’s morning session. Since BN held its ground, the algo trades all performed exceptionally well, and the heightened volatility improved the option selling margins.
From the recent top of 48161, BN is falling, but yet to make a lower low or lower high. Unless the 2nd leg starts, we wouldn't know with clarity what it has in mind. To go bearish, we need to fall below 46176 another 800pts away. If both BN and N50 are facing the same direction - then we can expect the big boys to enter the shorting arena. If we are to get a relief rally or retracement, it should be driven by the banks - because they are still the strongest sub-sector in Nifty.
63mts chart
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Algo Trading
Our algo trades ended today with a gain of 14380.
BN was calm as a cucumber, on one side the Nifty50 heavyweights were tanking but BN kept its cool. Usually, Banks are the first to react to any news related to “froth”, “valuation” etc. Mainly because the valuation, loan against shares, etc all depend on the underwriters and financial institutions that did the due diligence. When the markets are going up, nobody is really worried. But when the stocks start crashing, the valuations get impacted and people start getting margin calls. When this situation is combined with a contracting money supply - businesses could face restrictions in raising new capital.
4mts chart
The only reason I can think of why the Banks did not fall today would be due to the expiry aspect. If that is the case, we should be seeing the FOMO effect in tomorrow’s morning session. Since BN held its ground, the algo trades all performed exceptionally well, and the heightened volatility improved the option selling margins.
From the recent top of 48161, BN is falling, but yet to make a lower low or lower high. Unless the 2nd leg starts, we wouldn't know with clarity what it has in mind. To go bearish, we need to fall below 46176 another 800pts away. If both BN and N50 are facing the same direction - then we can expect the big boys to enter the shorting arena. If we are to get a relief rally or retracement, it should be driven by the banks - because they are still the strongest sub-sector in Nifty.
63mts chart
–
Algo Trading
Our algo trades ended today with a gain of 14380.
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