PostMortem on BankNifty Today & Analysis of 17 APR 2023

2023年4月17日

BANKNIFTY really held its cool today! During preopen INFY was showing an open rate of -10%, and everybody would have thought we are going to see a massive sell off today.

IT sector in total was in focus today as the INFY even though had not so bad results was quoting at 10% lower circuit. I think I saw it go down to 12.3 or 12.5% - since I do not track the IT index that closely, it did not really bother me.

However I was excited to see how bank nifty will react. You might be aware that a sell-off in IT will impact the banks the most. A recession or a job loss in IT would mean a lot of NPAs and loan defaults as IT employees are the main people who take exuberant loans at unbelievable valuations.

The opening chaos is very visible in the charts of HDFCBANK , ICICIBANK and AXISBANK . SBIN had a contradicting pattern and surged ahead. KOTAKBANK was least impacted- the opening volume was unusual and it had a bright day.

At 10.05 bank nifty secured its feet and then started climbing. So this blip stayed only 45mts and you would not believe how the price action from the last session continued today also.

The 45mts of downward fall was well negated by what followed. I guess the dip buyers were back and immensely supported for a close +130pts today.
It will also meaningful to showcase the Nifty50 chart also, since IT index took a huge beating today, it was visible in Nifty50. There was a recovery post 10.05, but the close was in red unlike the bank nifty.

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The options data also requires special mention today, both banknifty and finnifty options were unaffected by the volatility, the NIFTY options had a good ride today. At a point I saw VIX hovering around the +10%, seeing the recovery in banknifty, I was immediately convinced the best place to take an option trade was Nifty50 instead of BankNifty.

This makes an exciting week ahead. If there is further weakness in IT, it will spill over to the financial sector with a delay.

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15mts on Banknifty says the uptrend is intact and today's blip has made no special impact. We need a support break of 41624 to get some attention of the bears !

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1hr also looking promising for the bulls, the next resistance at 42576.
In fact in zerodha's TV chart a day high near this resistance level is visible, I am not sure why its missing in the TV chart directly. And today's price action rejection came at the resistance level only.