Bank Nifty CRASH! - Post-Market Analysis


NIFTY started the day at 18,774 with a small gap-up of 18 points. It immediately gave a fall till 18,720 and made a good recovery of nearly 75 points to 18,795 levels. The index faced rejection there (which was also near the previous high). Then, Nifty came crashing down to the day’s low again, consolidated around the 18,720 zones for a while, and finally broke down. Nifty closed at 18,688, down by 67 points or 0.36%.

BANK NIFTY started the day at 44,054 with a gap-up of 66 points. Right from the beginning, the index was under huge selling pressure because of HDFC twins. It fell more than 700 points from the day’s high (from 44,050 to 43,390), breaking all major supports near 43,900, 43,700, and even the round level support of 43,500. BNF closed at 43,443, down by 544 pts or 0.21%.

All indices except Nifty Pharma (+1.4%), Nifty FMCG (+0.5%), and Nifty Auto (+0.17%) closed in red today. Nifty PSU Bank (-1.9%) fell the most.

Major Asian markets closed flat-to-green. European markets are currently trading in the red.

Today’s Moves

Apollo Hosp (+4.19%) was NIFTY50’s top gainer. 

Divi's Labs (+2.7%), Dr Reddy's Labs (+2.2%), Cipla (+1.9%), Zydus Life (+3.16%), and other pharma stocks showed gains in a weak market.

HEG (+15.4%) surged after brokerage firm InCred initiated coverage on the stock with an “add” rating.

Hero MotoCorp (-3.02%) was NIFTY50’s top loser. As per reports, the Ministry of Corporate Affairs (MCA) has ordered an investigation against the company over alleged corporate governance issues.

ZEEL (-4.2%) fell after the Securities Appellate Tribunal deferred the company's appeal against market regulator SEBI for June 19.

Shares of Varun Beverages turned ex-split today.

Markets Ahead

The Indian markets have finally broken down from the consolidation zones. The very long consolidation over the past week in Bank Nifty has come to an end, and the index has broken down.

As we said in yesterday’s Post Market report, a breach of 44,000 in Bank Nifty could trigger a fall to 43,450 zones, and we saw the market moving exactly like that today. In Nifty, the resistance zone of 18,780 played out well, and the index gave a fall to 18,680 levels.

Overall market sentiments have turned bearish. If today’s low is broken in Bank Nifty, a further fall could be triggered till 43,000 and 42,700. But now, the index is exactly at the low of the consolidation zone. A small retracement could happen mostly after a very good red candle. So we can expect a small pullback tomorrow or in the coming week, and the markets may go directional again.

Even though Bank Nifty is looking more bearish, Nifty is still respecting the trendline (on a daily time frame) and has not given a closing below it. So if today’s low or the current support level of 18,650 is breached, the index could fall to 18,450 levels (which acted as good support earlier).

Despite the huge selling pressure today, India Vix has not increased! In fact, it has come down, which also indicates that the markets can consolidate again or move up slowly. This tells us that Bank Nifty is again back in the zone, and Nifty can move up to hit an all-time high (ATH) in the coming week.

For an Option Seller, today’s expiry was tricky as markets were moving in both directions. We hope you were able to plan your trades properly using the views shared by us on YouTube Live!

How was expiry day trading? Are you in net profit/loss? Let us know in the comments section of the marketfeed app.

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