15 Feb ’24 — Nifty within kissing distance of a Bullish breakout
Nifty Analysis - Stance Neutral ➡️
Recap from yesterday: “In the 63mts chart, see the encircled region — the strength of the green candles stands out prominently. This has given Nifty a total makeover, till yesterday we were neutral with a moderate bearish bias. Today we are still neutral but with a bullish bias — as the resistance of 21913 is much closer than the support of 21491.”
4mts chart
Nifty has lived up to the expectation today, the momentum it gained yesterday post 14.07 was legitimate. Not only did Nifty hold its ground today but showed intent to take out the 21913 resistance. The open was right at that zone but we quickly lost a few points. The candle at 09.47 carried the hidden message that a breakout was in the cards. That single candle had a swing range of 73 points. Even though we did not do anything unusual till 13.31 - the options premium was going crazy. One mistake I made was to switch to the next-weekly instead of the current one as I felt a breakout would happen post 3 PM. The break came early at 13.35 and what it did was shoot up the CE premiums, nothing unusual in that. But the PEs were not dropping in value. So on one side, my short CEs were trading in deep RED whereas the short PEs were not going into green.
Meanwhile, the breakout did not prove successful - but it definitely woke up the bulls. Almost all the top 8 components were reacting positively to this break. The final close was right near the 21913 SR zone. Over the last week, Nifty rose 166 points ~ 0.76% and if you notice the 63-minute time frame - it has formed a triple bottom-like formation on a descending trendline. Since Nifty already retraced back to the resistance level - we assume it is ready for the next leg of outperformance. The first thing it has to make sure tomorrow is to defend the 21913 levels - if it falls below that, the bullish breakout will not pick up pace. A gap-up is ideal as it will quickly tip the balance to the Bulls as short sellers will have to run for cover. We wish to change the status from neutral to bullish only if we get a 63mts candle above the 21913 resistance line.
63mts chart
Recap from yesterday: “In the 63mts chart, see the encircled region — the strength of the green candles stands out prominently. This has given Nifty a total makeover, till yesterday we were neutral with a moderate bearish bias. Today we are still neutral but with a bullish bias — as the resistance of 21913 is much closer than the support of 21491.”
4mts chart
Nifty has lived up to the expectation today, the momentum it gained yesterday post 14.07 was legitimate. Not only did Nifty hold its ground today but showed intent to take out the 21913 resistance. The open was right at that zone but we quickly lost a few points. The candle at 09.47 carried the hidden message that a breakout was in the cards. That single candle had a swing range of 73 points. Even though we did not do anything unusual till 13.31 - the options premium was going crazy. One mistake I made was to switch to the next-weekly instead of the current one as I felt a breakout would happen post 3 PM. The break came early at 13.35 and what it did was shoot up the CE premiums, nothing unusual in that. But the PEs were not dropping in value. So on one side, my short CEs were trading in deep RED whereas the short PEs were not going into green.
Meanwhile, the breakout did not prove successful - but it definitely woke up the bulls. Almost all the top 8 components were reacting positively to this break. The final close was right near the 21913 SR zone. Over the last week, Nifty rose 166 points ~ 0.76% and if you notice the 63-minute time frame - it has formed a triple bottom-like formation on a descending trendline. Since Nifty already retraced back to the resistance level - we assume it is ready for the next leg of outperformance. The first thing it has to make sure tomorrow is to defend the 21913 levels - if it falls below that, the bullish breakout will not pick up pace. A gap-up is ideal as it will quickly tip the balance to the Bulls as short sellers will have to run for cover. We wish to change the status from neutral to bullish only if we get a 63mts candle above the 21913 resistance line.
63mts chart
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