24 Jul ’23 Post Mortem on BankNifty -Bulls lost control? Not YET
I had a long call on banknifty and a short call on nifty50. All of us know very well that the probability of that happening is quite rare. Well we go as per what the chart says, banknifty showed strength on the last working day even when nifty was falling.
Today also banknifty was staying strong until the 286pt fall from 11.30 to 11.55 - just after this price move weak links started appearing among the component stocks. The main culprit for today’s fall was Kotak bank that fell 3.7%. I would really say this could be a start!
When HDFCBK came with results, we discussed the possibility of NPAs rising. In fact a rising NPA in an interest rate rising regime poses the same danger as an avalanche. When cracks start appearing - the breaks are going to be profound. Currently most of the banks will have good quarterly results mainly because they would have pushed the rate hike to their credit accounts (loans). The real test comes in when these loans go bad (default).
I am not inclined to go short on banknifty yet, would like to see the price action for 2 more days before deciding. 45830 levels also might offer a small support - if this breaks then it might be interesting to look out for bearish opportunities. During the closing hour there was a small hint that CALL writers are getting interested - this might help tip the balance to the bearish side!
Today also banknifty was staying strong until the 286pt fall from 11.30 to 11.55 - just after this price move weak links started appearing among the component stocks. The main culprit for today’s fall was Kotak bank that fell 3.7%. I would really say this could be a start!
When HDFCBK came with results, we discussed the possibility of NPAs rising. In fact a rising NPA in an interest rate rising regime poses the same danger as an avalanche. When cracks start appearing - the breaks are going to be profound. Currently most of the banks will have good quarterly results mainly because they would have pushed the rate hike to their credit accounts (loans). The real test comes in when these loans go bad (default).
I am not inclined to go short on banknifty yet, would like to see the price action for 2 more days before deciding. 45830 levels also might offer a small support - if this breaks then it might be interesting to look out for bearish opportunities. During the closing hour there was a small hint that CALL writers are getting interested - this might help tip the balance to the bearish side!
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