Is Bank Nifty going to see a fantastic Friday?

On Thursday, Bank Nifty ended the day with a loss of 1.26%.

On the daily chart, it formed a bearish candle that carries a lower low and lower high as compared to its prior trading session. It has also declined below Monday's range on an intraday basis. The 34 EMA has been acting as strong resistance for the last four days. The index is now 1.58% below the 50DMA and 1.96% below the 20DMA. The four-day tight-range price action will give an impulsive move once it breaks out on either side of the range. The RSI has declined below its 9 periods average. The histogram shows that the momentum has increased on the downside.

Interestingly, all the directional indicators ADX, +DMI and -DMI are declining. The Elder impulse system has formed a bearish bar. On an hourly chart, the index is below the moving average ribbon, and the MACD line is below zero. The moving average ribbon is in a downtrend. Also, on the daily chart, the gap between the 20 and 50DMA is narrowing. On an intraday basis, it has broken down descending like triangle. In any case, if it declines below the level of 38518, it opens the gates for further downside. Only above the level of 38740, it may trade positively in the short-term and test levels of 38984 on the upside.

Strategy for the day

The Bank nifty ended day in red, but it recovered almost 200 points from the day's low. Going ahead, a move above the level of 38740 is positive, and it can test 38984 on the upside. Maintain a stop loss at 38620. Above 38984, continue with a trailing stop loss. But, a move below the level of 38620 is negative, and it can test the level of 38360. Maintain a stop loss at 38750.