Would Bank Nifty rescue the markets from interest rate hike jolt from US Fed?

Would Bank Nifty rescue the markets from interest rate hike jolt from US Fed?

by 5paisa Research Team Last Updated: Dec 14, 2022 - 11:55 am 15.6k Views
Listen icon

On Wednesday, the Bank Nifty ended the day with a loss of 0.64%. It has formed a long-legged doji or a high wave like candle on the daily chart with a lower high and lower low. The 5EMA acted as a support on Wednesday, though it was breached on an intraday basis, but it managed to hold it on closing basis.

As the US Federal Reserve has hiked interest rate by 75 basis points, the Banking and Financial sector stocks are expected to trade nervously. However, in the past these stocks have rescued market from a disaster as well, hence, we should closely watch, how these stocks react and whether dips would be used to buy these stock.

The RSI has declined further to 65 and formed a negative divergence. The MACD line is about to give a sell signal. On an hourly chart, the index closed within the moving average ribbon, and the MACD line is above the zero line, showing a neutral stance. The 40889 - 41677 zone will be crucial support and resistance for the index in the coming days. Either side breakout will give a directional move. The volume suggests distribution took place on Wednesday. There was a long unwinding as the price and open interest declined. All the index components closed negatively. Apart from the central banks meeting, Weekly expiry will increase the volatility. Better avoid the leveraged positions unless we get clarity on direction.

The Strategy for the day

The Bank Nifty closed in a neutral zone. A move above the level of 41255 is positive, and it can test the level of 41426. Maintain a stop loss at the level of 41190. Above the level of 41426, continue with a trailing stop loss. But a move below the level of 41055 is negative, and it can test the level of 40813. Maintain a stop loss at the level of 41190. Below the level of 40813, continue with a trailing stop loss. 

How do you rate this blog?

Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

oda_gif_reasons_colorful

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Disclaimer

Investment/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.
Enjoy 0%* Brokerage with 5paisa
Resend OTP
Please Enter OTP
Mobile No. belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Swing Trading Stocks: Week of 01 April 2024

Swing Trading Stocks for the Week

Weekly Market Outlook for 1st April to 5th April

The week gone by was a truncated week of three trading sessions, but it was not short of any action as the index witnessed a smart recovery in three days. Nifty almost tested the previous all-time high above 22500 on the expiry day and ended just above 22300 with weekly gains of a percent.

Stock in Action – Bajaj Finance

Bajaj Finance Movement of Day