Bank Nifty got confirmation of bearish engulfing pattern!

Bank Nifty got confirmation of bearish engulfing pattern!

by 5paisa Research Team Last Updated: Dec 13, 2022 - 09:35 pm 18.2k Views
Listen icon

Bank Nifty on Monday ended lower by 1.77% and in the last two days it has lost nearly 3.5%. 

On Monday, it opened with a negative gap and sustained below the opening level. It confirmed the bearish implications of the prior day's engulfing candle. It declined below the 13EMA. It took support at four-day tight range consolidation high. It filled the gap of August 11. The RSI has declined sharply below the 60 zone. It has also closed below the prior swing lows. The MACD has given a fresh sell signal, while the negative momentum indicator -DMI surged sharply. By closing below the previous week's low, the index also got the confirmation for the weekly shooting star candle. 

 Bank Nifty declined by 3.80% from the Friday high in just two trading sessions. The 20DMA support is just 0.62% away at the level 38060. A close below this level will fuel further selling pressure. The Elder impulse system has formed a strong bearish bar. The KST and TSI indicators have given fresh sell signals. For now, it is better to stay away from the long positions if it forms lower high bars. There may be some sharp bounces as the monthly expiry is on the cards. 

Strategy for the day 

Bank Nifty extended its losses for the second straight day and with this it got confirmation of bearish engulfing pattern. Furthermore, the Bank Nifty also closed at the low. Hence, the be with a negative bias. Only a move above the level 38390 is positive, and it that case it can test the level of 38592. Maintain a stop loss at 38300. But, a move below 38290 is negative, and it can test the level of 37800. Maintain a stop loss at 38385. Below 37800, continue with a trailing stop loss. 

How do you rate this blog?


Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage


About the Author

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


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. Also, The
Open Free Demat Account
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Weekly Outlook on Copper - 01 December 2023

Copper prices saw a modest 0.33% gain, reaching 722 on Thursday, as worries about a slowdown in Chinese manufacturing loomed large. The November's NBS Manufacturing PMI slipped to 49.4, the second consecutive monthly decline, heightened concerns, emphasizing the need for additional government support to fortify China's economic growth. The NBS Non-Manufacturing PMI at 50.2, reflecting the 11th month of service sector expansion, hinted at a softer pace.

Swing Trading Stocks: Week of 04 December 2023

Swing Trading Stocks for the Week

Weekly Market Outlook for 04 December to 08 December

Our markets started the truncated week on a positive note and it rallied higher throughout the week. The first day of the December month infact witnessed a new record as the Nifty surpassed its previous high and ended in uncharted territory above 20250 with weekly gains of almost two and a half percent.