Bank Nifty is in a state of flux as 50DMA is acting as a key hurdle!
On Wednesday, Bank Nifty erased its prior trading session losses and ended the day with gains of over 1%.
For the second consecutive day, the Bank Nifty traded within Monday's range. It also faced resistance at 50DMA for the third successive day, it is trading just 0.26% below it, and is 1.05% below the 20DMA. As the index is in a neutral zone, it is better to avoid taking high-leverage positions. The 39315-38518 range has to be violated for a decisive trending move. The MACD line is flat and below the zero line while the RSI is also still below the 50 zone. The trend strength indicator, ADX line, and positive directional movement indicator +DMI are declining. The -DMI is the dominating one at the moment.
On an hourly chart, it closed above the moving average ribbon and the MACD line is above the zero line, which is positive for the short term. For a medium-term direction, the index needs to move beyond the previous week's range of 37963-39608 range. Considering the global scenario, the index may further consolidate for a few more days, that said, volatility could be seen in the second half of the trading session due to weekly expiry.
Strategy for the day
Bank Nifty ended the day with solid gains, but it traded within the Monday range for the second consecutive day. A move above the level of 39121 is positive, and it can test the level of 39315 on the higher side. Maintain a stop loss at the level of 39000. Above the level of 39315, continue with a trailing stop loss. But a move below the level of 39000 is negative, and it can test the level of 38885. Maintain a stop loss at the level of 39121. Below the level of 38885, continue with a trailing stop loss.
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