Bank Nifty forms a shooting star pattern on the weekly chart!

Bank Nifty

by 5paisa Research Team Last Updated: Dec 13, 2022 - 04:01 pm 16.4k Views
Listen icon

Bank Nifty ended the last week with gains of 0.89%, however, it closed significantly lower from the highest point of the week as it was down by over 1000 points from its intra-week high. As a result, it has formed a shooting star candle after forming a lifetime high. As a rule, we short position in the Index with a shooting star's high as a stop loss. That said, wait for a confirmation and confirmation will close in form of closing below the shooting star low. 

The index formed a bearish engulfing pattern at the previous lifetime high. The bearish patterns at the new highs are generally successful. It closed below the prior day's low and took support at 8EMA for the day. It also got the confirmation for the previous day's bearish candle below its low. The Index closed below the 23.6% retracement of the up move from the August 29 low. The RSI declined below its 9 periods average. It has also developed a negative divergence. The Elder impulse system has formed a neutral bar. After two days of decline, the Index is now 2.73% above the 20DMA (39694). MACD line is about to move below the signal for a bearish signal. The histogram declined drastically, which is a caution for the bulls. For now, it is better to avoid taking long positions. Only above the level of 41000, it can regain some bullish strength. But, declining below the level of 40350 is a strong bearish sign for the index. 

Strategy for the day 

Bank Nifty closed below the moving average ribbon on an hourly chart. A move above level 40961 is positive, and it can test the level of 41135 on the upside. Maintain a stop loss at the level of 40820. But, A move below the level of 40775 is negative, and it can test the level of 40350. Maintain a stop loss at 40880. 

How do you rate this blog?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

oda_gif_reasons_colorful

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Disclaimer

Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
Enjoy 0%* Brokerage with 5paisa
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Market Outlook for 22 April 2024

Our markets corrected sharply in the week gone by mainly due to uncertainty over global geopolitical tensions and selling by the FIIs which resulted in the index breaking the 22000 mark. However, we witnessed recovery from the low of 21780 in the last trading session and Nifty ended around 22150 with a weekly loss of over one and a half percent.

Stock in Action - Escorts Kubota Ltd

Escorts Kubota Stock Movement of Day    

Weekly Outlook on NATURAL GAS - 19 April 2024

The cost of natural gas saw a 2.7% increase yesterday, closing at 146.90, as projections of limited feed gas demand and milder weather tempered upward momentum. Despite concerns over a significant storage surplus and reduced demand forecasts for the next fortnight, substantial price shifts were notably absent.