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Bank Nifty forms an inside bar; buy on dips continues to be the way to go!
Last Updated: 23rd May 2023 - 08:05 pm
On Monday, the Bank Nifty closed with a loss of 0.19% as a result, it underperformed the frontline index Nifty.
The Bank Nifty closed formed an inside bar as the price traded within the high and low range of the prior trading session. PSU Banks saved the index from a bigger fall. Its back-to-back small body and a long lower shadow candle, which clearly suggest that all the intraday dips were bought into. Monday's move does not have any trend-changing implications, as the index experienced an inside price action. The MACD line is below the signal line, and the histogram shows an increase in momentum on the downside. The RSI is still in a negative divergence.
On an hourly chart, the index has formed long shadow candles, showing the intraday volatility. It formed a series of bearish candles. The RSI failed to enter above 60 zones after failed efforts. The Hourly MACD is about to give a sell signal. The daily Elder impulse system has formed another neutral candle. The rollovers are 24.90% and equal to the last month's rollovers on the same day. But below the 3- and 6-month average. The open interest declined by 0.10% is not a big factor in influencing the price. Three days to go for the monthly expiry; there are no major trend indications. Wait for decisive closing above the prior day's high or low for a directional trade.
Strategy for the day
The Bank Nifty recovered from lower levels and it closed with a minuscule loss of 0.19%. Going forward, moving above the level of 43945 is positive, and it can test the level of 44145. Maintain a stop loss at the level of 43800. Above 44145, continue with a trailing stop loss. But, a move below the level of 43755 is negative, and it can test the level of 43600. Maintain a stop loss at the level of 43900. Below the level of 43600, continue with a trailing stop loss.
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