Bank Nifty forms an inside bar!
On Wednesday, Bank Nifty closed with minor loss of 0.09%. As the price traded within high low of prior trading session, it has resulted into formation of an inside bar. It also resembles to a hanging man candle. As the policy risk is in place, the index hesitated to move in either direction. The indecision is common before the monetary policy. The price has not given any kind of weaker signs. It has just consolidated for the day. It recovered over 300 points from the day low and showed the trend strength. As a rule of an inside bar, it must cross the previous day's high or low for a decisive direction. As the price traded within the previous day's range, the momentum has slightly declined. The RSI is still in the above 76 zone, which is an overbought condition. It is now important to cross the 38134 resistance on a closing basis. On the other hand, if it must also sustain above the 37632 for an uptrend to continue. The MACD line has almost flattened. The PSU banks are leading the index to sustain at higher levels. Their Q1 performances are the best in recent times. SBI and Bank of Baroda are looking technically and fundamentally. For now, set your eyes on low and the high of previous trading session as move above or below would result into a trending move.
Strategy for the day
Bank Nifty has formed an inside bar. A move above 38068 is positive, and it can test level of 38170 on the upside. Maintain a stop loss at 37980. Above 38170, continue with a trailing stop loss. But, a move below 38000 is negative for the index, and it can test the level of 37740. Maintain a stop loss at 38120. Below 37740, it can test levels of 37632 and this is a major support for the short term, hence, book profit for short position around these levels.
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