Bank Nifty is in a state of flux!

Bank Nifty is in a state of flux!

by 5paisa Research Team Last Updated: Mar 01, 2023 - 01:00 pm 899 Views
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After forming a decisive bullish bar on Monday, the Bank Nifty index failed to see a follow-through move on Tuesday.

Though the index attempted to move above the previous day's high, it failed to sustain at higher levels and closed near the opening level of the day. As a result, Bank Nifty has formed a Doji candle on the 200EMA. It failed to close above the previous day's bullish engulfing candle. Due to this, the bullish engulfing candle did not get a confirmation for its implications.

On an hourly chart, the last seven candles, with bigger shadows and small body, shows indecisiveness. This tight range and doji candles at the resistance will be tricky to trade. A breakout above the level of 40355, can give a sharper move on the upside. But, a move below the level of 40176 is negative for the index, and it can test the previous low of 39345, within no time.

The hourly MACD line just moved above the zero line. But the RSI is in a tight range. Let us wait for the first 15 minutes bar to close for a directional bias in Bank Nifty.

Strategy for the day

The Bank Nifty traded in about 220 points range throughout the day on Tuesday and it failed to sustain above the prior day's bullish engulfing pattern. Going ahead a move above the level of 40355 is positive for the index, and it can touch a level of 40560 on the upside. Maintain a stop loss at the levels of 40232. Above the level of 40560, continue with a trailing stop loss. But, a move below the level of 40160 is negative, and it can test the level of 39940. Maintain a stop loss at the level of 40355. Below the level of 39940, continue with a trailing stop loss.

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