Global cues are likely to spoil the lead gained by Bank Nifty bulls!

Global cues are likely to spoil the lead gained by Bank Nifty bulls!

Indian Market
by 5paisa Research Team Last Updated: 2022-09-01T09:41:06+05:30

On Tuesday, the Banknifty jumped over 3% and as a result, it closed above the August 25 high, forming a strong bullish candle.

The index closed above the 8EMA and 20DMA decisively and formed a parallel bottom at 37950. With the latest closing, it broke the neckline of the double bottom kind of a pattern with higher volume on a lower time frame. The daily 14-period RSI entered above 60 zone and is about to cross its 9 periods average. Looks like it got the bullish confirmations. This 1260-point rally was one of the biggest in the last six months. On a lower time frame, it formed higher high candles. Normally, this kind of impulsive move will enter into a corrective or consolidation mode.

As the global markets have not recovered even after a big fall, the Indian market may also enter into a correction. In any case, if it opens below the level of 39340, the correction may extend to level of 38900 followed by 38650. On the upside, above the prior day's high of 39606, will be bullish for the index and can continue the uptrend. Stay cautious for the first hour for trend clarity and watch out for the major support which is placed around the 20DMA.

Strategy for the day

Bank Nifty formed a sizable bullish candle and it closed strongly higher. Going forward, a move above the level of 39606 is positive, and it can test the level of 39789 on the higher side. Maintain a stop loss at the level of 39460 for long positions. Above the level of 39789, continue with a trailing stop loss for higher targets. But, on the downside only a move below the level of 39340 is negative, and it can test the level of 38900 followed by the level of 38650. Maintain a stop loss at 39555.

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