Bank Nifty has formed a shooting star like candle!

Bank Nifty has formed a shooting star like candle!

Indian Market
by 5paisa Research Team Last Updated: Dec 11, 2022 - 02:50 am 9.1k Views

On Thursday, the Bank Nifty hit a fresh all-time high of 42622.75. Thereafter, the bulls seemed to be tired as they failed to extend their gains.

The index traded mostly in the first-hour bar range. However, in the last leg of the trade, it trimmed its gains and closed with modest gains of 0.2%. On the daily chart, the Bank Nifty has formed a shooting star candle. Shooting star candle requires confirmation for bearish implication, which we are yet to see and hence, Friday's session would become of high importance.

Generally, the shooting star candle is a bearish formation at the top. Now, traders have two options, firstly, they can initiate a sell with the day's high as a stop loss. Secondly, wait for a confirmation in the form of a close below the shooting star candle. As the market is not in the mood to give a bearish signal, it is better to wait for confirmation. The momentum is declined compared to the previous days. On the hourly chart, it is clearly evident. The MACD line is declining. The index has the support zone at the zone of 42338-42207. Only a close below this on an hourly basis we may get the sell signal. Wait till then. A move above the 42612 will be positive and will resume the uptrend.

Strategy for the day 

Bank Nifty has formed a bearish candle i.e. shooting star candle. Going forward, a move above level 42560 is positive, and it can test the level of 42780. Maintain a stop loss at 42495. But, a move below the level of 42400 is negative, and it can test the level of 42140 on the downside. Maintain a stop loss at the level of 42495 for short positions. Below 42140, continue with a trailing stop loss for lower targets.

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