Ball is in the Bank Nifty's court to rescue the market; will it do it? let's find out

5paisa Research Team

Last Updated: 25th February 2023 - 10:24 am

On Thursday, Bank Nifty opened almost flat and in the initial hour of the trade itself, it made a low of 39600.

As the day progressed, Bank Nifty recovered from lower levels and at the close, it recovered almost 400 points from the day's low and it managed to close above its important psychological mark of 40,000. On the daily chart, the price action resembles the formation of a long-legged doji pattern. Though it recovered from lower levels and it has just closed below the 200EMA for the second day. As the long-legged doji candle formed at the bottom, a positive opening closing will signal a reversal.

Going ahead, a close above Thursday's high of 40147 will confirm the reversal and can test 41019, which is 20DMA. The Index almost tested the budget day low. It traded within the range of February 01, for the whole month. On the expected lines it tested the level of 39620 as well. For a negative bias, a close below this level will confirm the bearishness, and it can test the 200SMA. In such a case, the Index will form another lower low. For at least one week, the Index may trade between the 39190-41000 zone.

The momentum is completely on the downside. The RSI flattened as the index recovered and closed at almost the opening level. For now, apply neutral strategies like strangles and straddles.

Strategy for the day

The Bank Nifty closed almost at the opening level, trading in the first-hour zone. A move above the level of 40080 is positive, and it can test the level of 40367. Maintain a stop loss at the level of 39960. Above the level of 40367, continue with a trialling stop loss. But, a move below the level of 39960 is negative, and it can test the level of 39667. Maintain a stop loss at the level of 40080.

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