Onus is on Bank Nifty bulls to rescue the markets, will it or will it not, know here!
Bank Nifty surpassed its previous all-time high level which was registered in the month of October last year on a Thursday morning.
It did not sustain at higher levels and shaved off more than 600 points from the day's high and it ended the day with a loss of 0.47%. On the daily chart, it resulted in the formation of a bearish candle after the previous day's massive bull candle. Bearish candle formation is a new lifetime high and that too after a sizable rally raises alarm bells. Furthermore, it has formed solid bearish bars on the hourly chart, and the MACD line declined below the signal line. The RSI has formed a negative divergence on the daily time frame. Friday's session would be an interesting session to watch out for, would the bearish candle of Thursday gets confirmation, if it does, then certainly it would be the first sign of reversal. In any case, the Banknifty closes below the level of 40800, and the index will form a bearish pattern - a shooting star on the weekly time frame.
At the previous lifetime high, the index has formed a bearish engulfing candle. Let us wait and see this, will it form a bearish bar, or it just negates a bearish candle? As the global markets have breached their important support levels and the SGX Nifty is indicating a gap down opening, will the Banknifty act as a saviour or it will end it outperformance on the back of fragile global cues and the formation of a bearish candle, only time will tell. But as long as it trades above the level of 40800 be with a bullish bias.
Strategy for the day
Bank Nifty formed a bearish candle on Thursday. A move above the level of 41250 is positive, and it can test 41500. Maintain a stop loss at 41100. But, a move below 41100 is negative, and it can test 40800. Maintain a stop loss at 41220. Below 40800 continue with a trailing stop loss.
DisclaimerInvestment/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.
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