Nifty and Bank-NIfty Index Analysis for 19-03-2021

Nifty and Bank-nifty index analysis report for 19-03-2021

· 2 min read
Nifty and Bank-NIfty Index Analysis for 19-03-2021

Fundamental News

  • Nothing significant.

Global Markets

  • US markets closed negative. ❌
  • Asian markets are also mostly down. ❌
  • SGX Nifty is showing a gap-down opening of 70 points. ❌

Pre-Market View

SGX NIfty indicates a gap-down opening. We also have three red ticks from global cues. Food for thought-"Bad news is bad news. Very bad news is good news". Meaning in capital markets, especially in trading, if everyone expects the market to go down, it may do the complete opposite at that point to shake out the weak hands. Hence if the gap-down is significant, trade long for short covering.

Intraday Trade Setups

Pullback Trade:

  • Both Nifty and Bank-Nifty opened gap-down with huge space to the downside. However, the recent trend has been that indices make a new low and then reverse from there trapping the shorts.
  • Short covering came after a new low was made creating an impulse to the upside.
  • After that, price drifted back without collapsing slowly.
  • At 12:15 am, nifty created a bullish hammer candle and then broke the pullback trendline creating a long opportunity.

Support Play:

  • Bank-nifty was the weaker index and hence pulled back a lot more.
  • A similar upmove was seen in bank-nifty only the set-up was different.
  • At 01:10 pm, bank-nifty created a solid green candle.

Market Breadth:

  • Almost all sectors ended in green with FMCG and metal leading the pack.
  • Only realty sector ended in red.
  • Hindustan Unilever was the top gainer in Nifty 50 with 4.51% gain.
  • TechMahindra was the top loser in Nifty 50 ending at -1.25%.

Trade Plan for Next Session:

  • Today markets reversed right after creating a new low without any classical reversal pattern trapping short.
  • Today, FIIs were net buyers for 1418 crores while DIIs were net buyers for 559 crores.
  • Markets may remain tricky and price-action would be key. On a higher timeframe, it is a retracement after a strong impulse to the downside whereas on a lower timeframe, it looks like a V-shaped recovery.