Category Archives: Nifty Bank

Market closed at resistance

Finally today both the averages, Nifty and Nifty Bank, have converged at on charts! Until yesterday Nifty bank was under-performing Nifty by almost 1% but that gap has been filled up today where Nifty bank out-performed Nifty with almost that same lagging difference. Indicators are yet showing some strength for the bulls on weekly charts but today markets closed near strong resistance on the channel line.

Nifty Close near resistance line at 8525

Nifty Close near resistance line at 8525

Nifty bank closed near channel resistance of 18685

Nifty bank closed near channel resistance of 18685

Though it doesnt mean that markets would fall from here but surely a big move is coming either way from tomorrow. Looking at the IIP and CPI just released, it seem we shall see some more movement upside but 8577 is strong resistance for Nifty where its recommended to book partial profits while above the same we may see 8700 levels. For Nifty Bank 18700 is strong resistance while above the same we can get 18950. Indicators are already overbought but looking at derivative data we may see some more positive movements. Though for traders i would always recommend stock specific trading rather than Index specific.

Nifty bank has all chances to out-perform this week!

Nifty bank has been a under-performer in last two weeks compared to Nifty Index.  But now looking the pattern on Nifty Bank daily chart is moving in a strong up channel and is appearing Upper resistance line while Nifty has already reached that trend line on similar pattern today.

Nifty Chart appearing resistance line of upside channel

Nifty Chart appearing resistance line of upside channel

Nifty Bank index appearing channel line

Nifty Bank index appearing channel line

Technically, indicators have also given internal signal line crossovers to show still valid momentum for the upside on Banking Stocks and Index. News from offical sources say that Government may soon infuse capital in PSU Banks  which could fuel rally in the index. Though going fresh longs at CMP would be bit difficult as Risk:Reward Ratio aint favorable but those who have a long position can hold with the targets of 18700 on the Bank index. While for a trailing SL can be at 17930.

Trade is on the channel “Bank”

Banking stocks have given a good rally from the budget low and specially PSU banks, but now since last 3 sessions we are losing some strength in the stocks. Some Private sector banks are trading at 52 week high which posted strong results for the last quarter. PSU banks are the cause of weakening because they are posting worst than expected results. This could be clearly seen in Nifty Bank index chart that too the monthly which is attested in the post. Index Trade is on the channel Bank on other side of which we could see a long term breakout but it seems lil difficult looking at the momentum in short term. Adding open interest Data , i feel 16000 as the bottom while 17000 is the resistance which is also the channel resistance. technically support is seen at Red line which is at 15790. So this week trading is crucial for banking stock.

Recommended Strategy on Index: Buy Around 15790 or above 16800 which is early. Stop loss would be 15500 and 16500 respectively.

Banks are weakening

Nifty Bank had been on bulls spree rally since start of February but now somewhere daily charts are showing some confirmed sign of weakness for near term. As we all could notice that index was trading in small narrow upside channel which is now breached and confirmed with a close yesterday and day before. Though for a safer side third close confirmation is widely accepted but we can take a risk before todays close as we have got some more signs from other factors. Crucial average of 100 day average has been breached yesterday around 15823 which adds more fuel to the fire of burning long opportunities. Smart traders and FII are already supporting charts which could be seen in their actions in Option segment where Calls have witness writing while near the money PUTS have seen unwinding. Even the indicators on daily charts have flattened and are just emerging over negative crossovers. So time to be cautious for long traders

My recommended strategy for Risk traders.: Sell 16000 CE and buy 15700 PE  tgt: 15150 SL: 15950

Fear Factor on Banking

Banking sector has been the most out-performing sector in after budget rally. But now it has approached dangerous resistance level and trader should at least book some profits on longs. Technically on daily charts, Nifty bank is resisting near to the 100 day average which is at 15950 while even the option data is suggesting strong wall at 16000 for this week. But most dangerous Fear Factor is on the weekly charts as attached! First danger is of 50 Week SMA crossing down 100 Week SMA which if confirmed can open gets for long slide on the index. Secondly, index is resisting since two weeks at the downside channel which is intact since the high last year. So now all eyes are on the some fundamental trigger. Two upcoming triggers are yellens Speech tonight and RBI policy next week. So strategy on trading as of now is Sell Nifty Bank April with tgts 15455/15120 SL:15950

NiftyBank Target Hit: 15350 and Reversal expected

Banks finally gave some strong rally and it triggered my upside target of 15350 as recommended at Lenders of Last Resort on March 2nd. Strategy recommended was to go long on 15100 Ce and Short 15500 CE. As recommended to 15100 CE should have been covered yesterday which traded last at Rs.500. and recommend to hold 15500 CE forward for next weeks strategy

As you guys can notice in the graph that a “Spinning top” has been embarked on daily charts yesterday and it has exactly pinched high at my red horizontal line  which i had intimated you guys in the last post on Nifty Bank. After such a fantastic rally, a intermediate profit booking is expected on banking stocks of almost 50% of their recent rally. Even the Gap unfilled is at 14450 which is coinciding with retrenchment level. Had been tracking options on Friday and found out that writing has been done at 15500 CE and highest Open interest stand out there too suggesting a strong resistance on closing basis.  So now traders can take a risk of going short for some gain.

Recommended Strategy:

Hold short on 15500 CE which was recommended in last post  and now buy 15200 PE 

Target: 14650 (Square-off all Options around that level)

Stop-loss: 15500 (Closing basis)

 

Lender of Last Resort: Banks

Just after the budget, i posted Bank on Banking and recommended a Long strangle with the upside target of 14650 and surprisingly it is achieved in just 2 sessions.  Bank has proved its characteristic of being Lender of Last Resort but it was profits this time. Had been recommending PSU banks and specially SBI and BoB as a budget pick on various social media and TV Shows. Both of them has given run of their life in last two days which led Nifty Bank crossing downside channel convincingly on the upside. Even the positive divergence on my last post has worked out well. But now it shall approach small resistance at 50 day average which is around 15300-15400.  RSI is surely suggesting upside but we may witness minor wave correction which could be steep one. Looking at the global markets and the strength of buying in cash markets, we can be biased to be still holding long for the upside in coming days. So stay long on Banking Stocks and index

Recommended Strategy:

Buy 15100 CE and Sell 15500 CE: Net Payout =422-248=174

Exit 15100 CE on my tgt of 15350 on Nifty Bank.

Bank on Banking

Banking stock has been the most under performing in the recent times. Especially, PSU Banks had been the most hard hit on NPA Concerns. But finally Nifty Bank charts are giving some positive divergence at the CMP:14036 with respective to RSI and Volume. As we all can notice in the chart attached, index has been trending in the downside channel, so the view for a short term still can be intact with Bearish but, looking the divergence as marked between the Nifty Bank against RSI and Volume,  we can take a bit risk at CMP. Already Budget was announced, and primarily studying it at a flash it is saying its positive for the Banking sector as govt has set aside a fund for PSU Bank’s NPA and also now analyst are expecting a rate cut before before next policy. Even the great cut on Fiscal Deficit is the achievement for the Indian economy. So surely one can take a risk on Nifty bank at CMP with the support from the PSU Banks,

Recommended Strategy for Risk Takers: Buy Nifty Bank 1 lot and Hedge with 13800 PE March

 

Recommended Strategy for Long Traders: Create a long Strangle with buying 14300 CE March and 13900 PE March on Nifty bank

 

Tgt for this expiry:14650 

Stop loss: 13600

BankNifty short covering to continue

BankNifty has seen worst sell-off in last 2 expirys compared to other indicies in the markets but that was obvious after it was the most outperforming for 2 years before these expires. After a free fall, now i expect a short covering the Banking Stocks and BankNifty index. Overall, you could notice in the adjoining weekly charts of Banknifty, the index has taken strong support at 100 Weekly average at 15760 which was also a gap created in last october. Now on the upside we, black monday gap could be filled up at 17850 which is coincinding with two more technical resistance level which means it is cemented resistance. Indicators too are in oversold zone and at lowest levels since 2008 which means a pull back cannot be ruled out. So overall we could be long on this index with short term target of 17800. 

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Downsizing channel on BankNifty

BankNifty had been the outperformer in the last rally since 2011 but now it seems it would be an equal partner for underperformer in the coming future. Overall sentiments in the markets have turned bearish after the sell of on Friday. Even the global markets had seen sell off on late Friday giving a sign of weak opening tomorrow. If we look at the long term chart of BankNifty, than we had seen a rally from 9940 to almost 21500 which hasnt corrected yet enough to move further and my analysis suggest correct has begun. But as we have more traders so i had to watch the chart closes from Daily period. As we could notice in the chart, index was trading in the downside channel and it has almost breached on Friday. As we expect a gap down tomorrow, this channel is also breached and we could see downsizing channels on BankNifty daily chart which support my weaknening markets. 18346 is the 100 day average which has crossed 200 day average at 18542 for bearish crossover giving a selling idea for the medium. The crossover has been confirmed as the index is trading below the crossover and both the moving averages. As the expiry week kicks off tomorrow, i am expecting a short covering this week but use this as a opportunity to square of your longs and short new trades for next expiry. Stop loss would come at 18850 which is the resistance line of the channel. GST bill and Rate cut are the only trigger which could give some chance of reversal but it has very nuch thin chance to cross 18800 in near future. So overall the index seems to be weak in medium term. Sell rise is what i recommend