Bank Nifty closed at a new lifetime, what's next in store?

Bank Nifty closed at a new lifetime, what's next in store?

by 5paisa Research Team Last Updated: Dec 14, 2022 - 03:19 am 9.4k Views

On Friday, the Bank Nifty opened with a gap up and it surpassed its previous all-time high level. 

The index registered an intraday high of 42345. However, some volatility kicked in and Bank Nifty trimmed its gains from the day's high. However, HDFC twins helped the index to close with a gain of over 1% and at a new lifetime high. Meanwhile, on the daily chart, it has formed a candle which resembles a long-legged doji candle. Going ahead, it has to sustain above the level of 42000 to continue its bullish bias. The leading indicators are not yet reached the overbought condition. The index is 3.34% above the 20DMA and 5.1% above the 50DMA. Though the PSU banks are giving the highest Alpha, the BankNifty as a whole is losing its momentum in the RRG charts. The momentum declined below the 100 zone. As it formed a doji candle. 

Monday would be an interesting day to watch out for if the long legged doji doesn't get confirmation or a follow-through sell-off. Then, it might move in a range for a couple of days and thereafter, we will see bulls regaining power. On other hand, in case it opens negatively, we may see some profit booking. Traders can keep the prior bar low as a stop loss and continue with the long positions. The upside target is open towards level of 43262 as long as it sustains above the 42000 level. 

Strategy for the day 

The index closed at a new lifetime high and formed a long-legged doji like candle. A move above the level of 42162 is positive, and it can test levels of 42490 on the higher side. Maintain a stop loss at the level of 42000. Above 42490, continue with a trailing stop loss. But, a move below the level of 42000, can test the level of 41840. Maintain a stop loss at the level of 42130. Below the level of 41840, continue with a trailing stop loss. 

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