Bank Nifty is cruising along!

Bank Nifty ended Wednesday's session with a gain of 0.64% and recorded a fresh all-time high level. 

The price action for the day has formed a small-bodied candle with shadow on either side, this candle resembles a high wave candle, but it carries a higher high and higher low. As a result, it has negated the bearish implications of doji candle formed in the prior trading session. That said, it has formed another indecisive candle at the top, showing the exhaustion of the rally. The MACD line and the signal line are moving together and the histogram has been on the zero line for the last two days. The RSI is in the strong bullish zone and has not shown any signs of weakness. The positive thing is it broke out of a tight base. There is no opportunity for short positions. Only a close below the 5EMA, the level of 42495, will confirm the weakness. The next support is at the level of 42161. On the upside, the index can test the level of 43288 in the near term. The index may witness volatility amid monthly expiry, hence, keep strict stop loss and avoid over-leverage positions. 

Strategy for the day 

Bank Nifty formed a high wave like candle, indicating exhaustion at the top. A move above the level of 42774 is positive, and it can test the level of 42935 on the upside. Maintain a stop loss at the level of 42680. Above the level of 42935, continue with a trailing stop loss for higher targets. But, a move below the level of 42660 is negative, and it can test the level of 42554. Maintain a stop loss at the level of 42708. Below the level of 42554, continue with a trailing stop loss.