Banknifty forms an inside bar!

Banknifty forms an inside bar!

Indian Market
by 5paisa Research Team Last Updated: 2022-08-29T08:11:06+05:30

Ok Friday, the Banknifty traded within the high and low of prior trading sessions as a resulted it has formed an inside bar on the daily chart. It formed a long-legged small body candle on a weekly chart after huge volatility. The 8EMA acted as strong support for the last two days. It faced resistance at 78.6 per cent retracement of the prior downtrend. It took support at 23.6 per cent of the previous upswing. The MACD and RSI are trending down. The RSI has declined below the 70 zone and it came out of the overbought condition. The Elder impulse system has formed four consecutive neutral bars. KST and TSI indicators have given a bearish signals. Currently, it trading 1.24% above the 20DMA (38511). A decline below this level is negative for the index. Last week's low of 37950 is the immediate target and support as this level is also a minor low and 23.6 per cent retracement level of the prior upswing. On an hourly chart, it has closed within the moving average ribbon. On a lower time frame, a move below the level of 38895 along with the MACD line below zero line is a bearish sign. In any case, if the index breaks below the 38895, the downside move will confirm. The immediate target is 36906. Monday's closing will give some key signals for the future trend. Remain cautious and keep the Thursdays high as a stop loss for the short positions. 

The Strategy for the day  

The Banknifty formed an inside bar on Friday. A move below 38846 is negative, and it can test 38373. Maintain a stop loss at 39000. Below 38373, continue with a trailing stop loss. Only above the level of 39100 consider taking a long position with a strict stop loss of 38950. 

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