Shooting star candle formation raises concerns!

The Bank Nifty ended lower by 0.63% and ended the day below its crucial short-term moving average of 5EMA. 

On the daily chart, the Bank Nifty formed a shooting star candle. In the last seven trading sessions, the index closed below the opening and formed either bearish or indecisive candles. At the same time, it is trading in a 43570-44150 zone. There is a high probability of breaking down this range, as the price action suggests the same. During the last seven days, the volume has declined. All the major indicators have developed divergences. As the index formed a tight box and the Bollinger Bands began contracting, expect a highly volatile move in the coming days. A close below 20DMA (43503) will be very negative for the index. The US developments on the debt ceiling and the fears of default are hitting the markets worldwide. In such a case, our market can witness a knee-jerk reaction. Only a decisive close above the 44151 will be positive. Otherwise, stay neutral to bearish biased. On the downside, it can test 43000 in a faster manner once it breaks below the 20DMA. 

Strategy for the day 

The Bank Nifty closed near the day's low and it has formed a shooting star-like candlestick pattern. Moreover, it has settled near the box range support area. A decisive move below the level of 43640 is negative for the index, and it can test the levels of 43340 on the downside. Maintain a stop loss at the level of 43740. Below the level of 43340, continue with a trailing stop loss. But only above the level of 43825 is positive for the index, and it can test the level of 43965 on the upside. Considering, its monthly expiry, volatility will be a hallmark for the day hence, follow strict risk management rules and don't take over leverage position.