18th Oct 2024 - Sensex will replace BankNifty for Algo strategy
BankNifty Stance Neutral ➡️
In last week's report, I did mention that we would be forced to exit the bearish position if we get a close above 51713. The fact is that we went above these levels by 15th October itself i.e. day 2 of this week. On Thursday, we melted and then on Friday, we saw the short covering that propelled us to close at 52138.
The short covering could entirely be because of HDFC and KOTAK bank quarterly results and the short-sellers would have panicked. I would like to inform you that the results are in-line and no major surprises. If the Bears are trying to get back into the game, they may do so in the opening hours of Monday 21st. To change my stance to bearish, we would need to close below 51713 now.
Meanwhile, I was backtesting and analyzing SENSEX in the hope that it could replace BankNifty for my intraday Algos. After 4 days, of analysis I have the following observations.
Margin requirements for Sensex are much better than BankNifty.
Exchange charges are much lower for Sensex. BSE will benefit a lot more as more traders will dump NSE.
The reward to risk ratio is better for Sensex than BankNifty.
The liquidity is lower and Bid/Ask spread is higher for Sensex than BN, I hope this will normalize once BN weeklies come to an end.
I strongly believe my algos could run on Sensex from December month onwards.
In last week's report, I did mention that we would be forced to exit the bearish position if we get a close above 51713. The fact is that we went above these levels by 15th October itself i.e. day 2 of this week. On Thursday, we melted and then on Friday, we saw the short covering that propelled us to close at 52138.
The short covering could entirely be because of HDFC and KOTAK bank quarterly results and the short-sellers would have panicked. I would like to inform you that the results are in-line and no major surprises. If the Bears are trying to get back into the game, they may do so in the opening hours of Monday 21st. To change my stance to bearish, we would need to close below 51713 now.
Meanwhile, I was backtesting and analyzing SENSEX in the hope that it could replace BankNifty for my intraday Algos. After 4 days, of analysis I have the following observations.
Margin requirements for Sensex are much better than BankNifty.
Exchange charges are much lower for Sensex. BSE will benefit a lot more as more traders will dump NSE.
The reward to risk ratio is better for Sensex than BankNifty.
The liquidity is lower and Bid/Ask spread is higher for Sensex than BN, I hope this will normalize once BN weeklies come to an end.
I strongly believe my algos could run on Sensex from December month onwards.
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