Brace for Fall in Bank Nifty now, Short term top created!!

Despite the negative economic news, markets have pleasantly surprised us this week ending on December 6th, 2024. A sudden increase in volatility during Thursday’s expiry and rapid movements in Bank Nifty have sparked optimism among traders and investors. It appears that there is a strong positive sentiment towards both NIFTY and BANK Nifty. While we have shared our short-term analysis on NIFTY levels in this link , it is now time to make predictions for Bank Nifty. In our previous article on Bank Nifty, we accurately forecasted the bottom of the market.

Now, after the quick upmoves, short term top has been created as per the chart reading. However, it looks anti-intuitive considering that RBI policy stance has given more more for liquidity management for banks, thanks to the CRR cut. This is supposed to support Banking stocks in coming quarters. Further, this cut might be the precursor to get repo rates reduction in Feb’2025 policy. This will further fuel banking sector stocks. All these positives will play out, but for now, the short term gain has been made and we mght see 2-3% fall in Ban Nifty before it starts its upward journey again. See the chart below. First scenario is providing possible levels of 52,300 to 52,500 and if it falls further , it could be upto 51,500 before it goes upside again. Only thing we can’t say is about the time taken to fall to that levels. Ideally, it shoule be 2-3 weeks negative consolidation that might bring it to the suggested levels. After that, it will start the joourney to make life time highs. We will review the situation at these levels . Until then, it will be better if Bank Nifty is shorted.