Will Banknifty extended it's gains and outpeorm?

On Thursday, the Banknifty gained about 0.50% and it managed to closed above the prior swing high. On the daily chart it has formed a sizable bullish candle. The index has retraced almost 78.6 per cent of the previous downtrend. The index has rallied 7413 points or 22.96% in just 42 trading sessions. This is one of the longest and highest percentage gains in a swing. The 8EMA acted as support in the current swing, is now placed at 38922. This is the crucial support now. Only if the index closes below the previous day low level, then only some cool off is expected or else don't think of short-selling. The indicators have reached the overbought conditions. The RSI has been in the overbought zone since July 27. It can continue to be in the overbought zone for some more time. After February 2021, the MACD has reached to highest level. The MACD line and the signal line are moving parallelly, not showing any momentum loss or gain. After four days, the Elder impulse system has formed a neutral bar. The RS Momentum is below 100. But, there is no weakness in the price structure. As long as it trades above the previous day's low, be with a positive bias. Upside may be limited, but there is a bearish signal, hence, best strategy is to continue with the trend. 

The Strategy for the day  

The Banknifty closed at a new swing high. Also, the outperformance and strong candlestick formation suggests be with the trend. A move above 39670 is positive, and it can test 39800. Maintain a stop loss at 39555. Above 39800, continue with a trailing stop loss. But, a move below 39500 is negative, and it can test 39240. Maintain a stop loss at 39670. Below 39240, continue with a trailing stop loss.