PostMortem on BankNifty Today & Analysis of 27 DEC 2022

27 gru 2022

After yesterday's rally, today we had a consolidation which can be taken positively. But the real test comes tomorrow as today's stock action in US markets will show its true color (red mostly) on wednesday 28th Dec.
This is largely because we had an unexpected 2.3% spike yesterday and major markets were on holiday

Quite an unexpected turn of events. On 23rd Dec we thought there could be a slight option for a short covering rally -…banknifty.medium.com
And today we had another green day on top of yesterday's rally. Is it sustainable? Lets watch out for US market action later today.
Personally i feel the current moves in Indian markets are a little overrated, moves with no change in fundamentals. 
BN opened gap up at 42827 today and see the image attached, it was rejected at the resistance level and the drop from 09.25 to 09.45 ensured the 1st level of support is also broken. 
For a moment i thought sanity is back, but that wasnt true either. BN stopped falling and from the period 09.50 to 10.50 it even went about the SR level of 42573.
The tendency of the market was to fall earlier today, the period 10.55 to 12.55 shows that - small lowering slope. And this changed by 13.45 when the SR level was taken out again. The total rally from 14.35 to close even ensured the resistance level of 42888 is hit.
Indian markets has to be credited showcasing immense bull fight. I really dont know how many big bears are left - what was really developing into a bear rally is now becoming a bull market retracement.
Since i am & always will be a contrarian, i would like to look out for bearish opportunities on wednesday & thursday.

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Of the bank nifty components:
HDFC started gap up and then went into negative territory, only by 14.45 it started moving above water
ICICI had gone underwater opening 20mts, but the momentum to the upside was very strong, it was evident in the last 1 hr of trade
SBI was holding its ground and then went higher after 13.25. Absence of selling can be considered as a positivity.
AXIS also dipped to negative region opening 20mts. but it managed to grind higher, the final 50mts ensured its closing in green.
Kotak had a gap up and even though dipped below flat line for a brief period - it held its ground. Trade today can be seen as positive.
IndusInd also stood its ground, was not falling below the flat line that much - final close also positive.

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This is how the SPX chart looks on a 1hr TF. The fall below 3945 support has to be seen as negative. Currently its at 3834 SR area with the next support at 3757.
If the indian markets has to move up tomorrow, then we need a positive closing for US markets. The chart pattern may not be showing positivity - but we never know whats going to happen next.

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15mts vs 1hr comparison - bank nifty. Today's trade cements yesteryday's action - but we need to look at tomorrow's data too for confirmation.
If we dip tomorrow then its going to be a classic lower high formation.