Crucial day for Bank Nifty; watch out these key levels!

On Monday, the Bank Nifty ended the session down by 1.82%, and closed nearly 300 points higher from the day's low. 

 It tested the previous week's low. For now, it is holding the 23.6% retracement level of the prior upswing. It closed decisively below the 20DMA but took support around the 30DMA. The price structure looks like a double-top pattern. In any case, a close below 38000 will lead to the pattern breakdown on the daily chart. The index formed a strong heikin aish bearish candle. The RSI has declined to below the level of 55 and reached in a neutral zone. The MACD histogram is sharply down and shows the bearish momentum. The RS momentum also declines below 100. The KST and TSI indicators are in a bearish setup. 

On an hourly chart, the index is below the moving average ribbon, along with the MACD line below the zero line, which is a negative. The moving average ribbon has entered into a downtrend. Only above 38800, the index turns positive. On Tuesday, only a move above the 38400 is positive on an intraday basis. As Wednesday is a holiday, it is better to avoid carrying positions. As the risks and volatility are high. 

Strategy for the day  

Bank Nifty traded within the first hour's range and in a tight range. A move above the level of 38400 is positive for the bank Nifty, and it can test the level of 38577. Intraday long traders can maintain a stop loss at the level of 38170. Above the level of 38577, continue with a trialling stop loss. But, a move below the level of 38170 is negative for bank Nifty, and it can test the level of 37888. Maintain a stop loss at the level of 38340. Below 37888, continue with a trailing stop loss.