Bank Nifty bulls in no mood to give up!

Bank Nifty eked out modest gains on Wednesday and settled at level of 32827 up by 0.13%.

As the closing price was very close to the opening level it led to formation of a Doji candle on the daily chart. Though it had formed a Doji, it has maintained its rhythm of higher high and higher low. Talking about moving averages barring the long-term moving average i.e. 200DMA, all other moving averages like 20, 50 and 100DMA are trending up. The RSI (75.62) has formed a negative divergence in an extreme overbought condition. This major index also recorded a lower volume in the last eight months. Though the index closed positively, the momentum has declined further. The histogram is almost near the zero line.

Interestingly, the +DMI and the -DMI are declining. This shows neither the bulls nor bears are not in control of the direction. Thar said, trend is still strong as ADX is at 40.84. On a 75-minute chart, the RSI and MACD continue to move divergently. The Elder impulse system has formed the sixth consecutive neutral bar. On Thursday, If the Bank Nifty opens with a big gap up, the Doji candle's bearish implications will be negated. At the same time, only a close below the 38155 will give a bearish view. As the weekly expiry is on the cards, the volatility may be higher like the last weekly expiry.

Strategy for the day

Bank Nifty has formed a doji candle and traded in the range for the day. A move above level of 38370 is positive, and it can test level of 38600 on the upside. Maintain a stop loss at 38280 level. Above 38600, continue with a trailing stop loss. But a move below 38200 is negative, and it can test level of 37950. Maintain a stop loss at 38290.