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BankNifty no signs of weakness visible!
Last Updated: 19th October 2022 - 09:12 am
On Tuesday, the Banknifty opened with a positive gap of over 300 points and it sustained above the opening level and went on to touch intraday high of 40435. However, profit booking at higher levels resulted into trimming of gains as index shed nearly 120 points from the days high, but it still managed to register gain of 1% at the end. On the daily chart it has formed a small body candle with a bullish bias. It looks like an evening star. Only in case of the index opens lower and closes negatively, the bearish implications of evening star would comes into effect. The index decisively closed above the 61.8% retracement level of the prior down move. The next resistance zone is at 40700-887. Above this zone, it can test the level of 41270. The RSI has moved near the 60 zone, and the MACD histogram shows improving momentum. The ADX (18.46) is still showing a lack of solid trend strength. That said, the index has managed to close above the Anchored VWAP, and the KST is about to give a bullish signal. Other than the exhaustion candle, there are no weaker signals visible as if now.
The Strategy for the day
The Banknifty has formed a small body candle. However, it maintained it rhythm of higher high and higher low. The index is trading above its all important moving averages, which is positive. Now, going ahead, a move above the level of 40389 is positive, and it can test the level of 40521 on the higher side. Maintain a stop loss at the level of 40287. Above the level of 40521, continue with a trailing stop loss. But, a move below the level of 40287 is negative, and it can test the level of 40080. Maintain a stop loss at the level of 40400. Below the level of 40080, continue with a trailing stop loss.
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