Nifty Nears Correction as Sensex Drops 1,300 Points Amid Broad Selloff
Bank Nifty's support level holds key as index faces threat of reversal!
Last Updated: 26th April 2023 - 10:40 am
Though Banknifty managed to end the day with modest gains of 0.10%, it trimmed about 200 points from its days high and as a result, it has formed a shooting star like candlestick pattern.
With this retreating from the high, the Bank Nifty has tested Monday's breakout level. It closed below the opening level on a high volume. Though it closed positively, the candlestick suggests that it is time to take profits of the table.
Only if it moves above Tuesday's high of 42866, it's likely to continue the rally. As mentioned yesterday, the immediate target level of 43000 is almost achieved. After the first hour of trading, the Banknifty has formed indecisive and bearish candles. The Hourly MACD is about to give a sell signal. HDFC Bank's decline is a big worry now for the index. PSU banks have been driving higher for the last two days. For the next two days, if the index close below the level of 42400 will signal the bearish mode. On the downside, it can test the level of 41962-800 of support. For this monthly expiry, the 41800-42866 zone will be crucial to watch out.
Strategy for the day
The Banknifty has formed a shooting star like candlestick pattern. Formation of this candlstick pattern on the daily chart raises suspicion about the continuation of uptrend.That said, the index traded above it's 5EMA, which has been a good support for the index as long as it trades above this support level, bulls have chance to make a comeback. Going forward, a move above the level of 42734 is positive, and it can test the level of 43000 on the upside. Maintain a stop loss at the level of 42630. Above the level of 43000, continue with a trailing stop loss. But, a move below the level of 42570 is negative, and it can test the level of 42269. Maintain a stop loss at the level of 42634. Below 42269, continue with a trailing stop loss.
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