Bank Nifty Drags Nifty as Feb Series Begins on a Negative Note

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NIFTY 50 EOD ANALYSIS 28-1-22

In this post, I talk about the analysis for the day and the trading range for tomorrow. The video discusses with the help of the charts how the indices as well as leading stocks performed during the day and their likely play tomorrow.

O 17208.30

H 17373.50

L 17077.10

C 17101.95

EOD -8.20 points / -0.05%

SGX Nifty 28-1-22 @ 1840h = -70

FII DII = Not yet available

CHART BASED CONCLUSIONS using 5 Minutes Chart

Nifty opened with a gap-up of close to 100 points and then went up by another 150 points and then went sideways for a while.

In the process, it broke 17300 but was able to find support around those levels and created a high for the day between noon and 1300h.

And as the FTSE opened, the “Sell” button was kept depressed for the rest of the day, and Nifty erased all the gains it made during the day and ended with a mild negative.

Yet, Nifty was able to register a higher high and a higher low.

NIFTY WEIGHT LIFTERS & DRAGGERS

Top 5 Lifters contributed = 34

Top 5 Draggers contributed = 56

Net = -22

BANK NIFTY WEIGHT LIFTERS & DRAGGERS

Top 3 Lifters contributed = 45

Top 3 Draggers contributed = 279

Net = -234

POSITIVES

IT big heads made a comeback though on a closing basis they ended far below their respective day high.

HDFC (NS: HDFC ) turned the corner but again ended far below the day high.

Nifty somehow managed to close around 17100.

NEGATIVES

HDFC Bank (NS: HDBK ), ICICI Bank (NS: ICBK ), State Bank Of India (NS: SBI ), and Reliance (NS: RELI ) were mainly responsible for dragging the indices.

Since the opening, the pressure on Bank Nifty was visible as Nifty was outperforming the index by a wide margin.

The movements within the Index futures were very fast with wide spreads.

TRADING RANGE FOR 28 JAN 22

Nifty Support = 16800-17000

Nifty Resistance = 17200 and above

Bank Nifty Support = 36500-800

Bank Nifty resistance - 38000-200-500

INSIGHTS / OBSERVATIONS
  • Yesterday, Bank Nifty outperformed Nifty and today it ensured that Nifty underperformed as it dragged Nifty from 17350+ levels to a flat and negative close. This is what happens when HDFC Bank, ICICI Bank, and State Bank Of India decide to initiate a non-cooperation movement.
  • Based on the recent market movements, I am now tempted to start having 2 trading accounts - # 1 for AM session trading and # 2 for PM [FTSE-based reactions] trading. This would help protect gains or cut losses booked in the AM session and likewise in the PM session.
  • In this quarter, Q3 results have not made any difference in the way the market perceives the corresponding price action. Good results have been hammered and not so good would in any case get hammered. In my view, this is a big change that has taken place though it may not have been noticed or felt by investors [and felt by the traders].
  • On account of the Budget related uncertainties, the far-away Index Options were also quite expensive. This indicates that there is a high degree of time value in it and the values are likely to collapse once the volatility eases post-release of the budget.

What do you feel about this?

Here is the link to the video:
https://youtu.be/g6m65lBxzsU

The post is for educational & informational purposes only.

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  • Sandip Bhujbal @Sandip Bhujbal
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