What are the key levels to watch out on weekly expiry day for Bank Nifty; know here!

On Wednesday, the Bank Nifty opened with gap down, and managed to trim losses and closed with modest loss of 0.53%. 

The candle formation on the daily chart is bullish as the price managed above the opening level. Though it closed below the previous day low, but it managed to close above 20DMA. It is just 1.01% above the 20DMA. It traded in a just 300 points range. It closed below very short-term 5EMA. The consolidation below 40000 will continue for some time. Even though the index outperformed the Nifty, the ADX and RSI are declining, is a big worry. These trend strength indicators moved lower when the index is near swing high. In any case, the index closes below the level of 39421, we may see some more downside move in the next week. 

As the index declined below the prior day's low, the Elder impulse system formed a neutral bar. The negative divergence on a daily RSI is clearly visible. At the same time, RSI declined below its 9-periods average. A close below 50 mark on RSI, would confirm the negative divergence for its negative implications. For the weekly expiry day, the 20DMA, which stands around 39061 will act as strong support, and on the upside the level of 39760 will be strong resistance. Either side breakout needs to be sustained for trending move. 

Strategy for the day 

Bank Nifty closed below the prior day's low. On the hourly chart, it closed in a neutral zone. A move above 39533 is positive, and it can test Rs 39760. Maintain a stop loss at 39415. Above 39760, continue with a trailing stop loss. But a move below 39415 is negative, and it can test 39220. Maintain a stop loss at 39510. Below, 39220 continue with a trailing stop loss.