Bank Nifty at Crossroads: Make or break moment for traders!

Bank Nifty has recovered almost 400 points from the day's low on Friday and formed a long lower shadow candle. 

Despite the strong recovery from lower, Banknifty closed below the previous day's high, as it formed a lower low and lower high candle. The negative divergence in RSI still persists. On a weekly chart, it formed a small body candle with shadows on either side, the upper shadow near an all-time high indicates selling pressure at a higher level and the lower shadow indicates buying at lower levels. It registered a weekly high close. Next week, if it fails to move above the previous high, it would have bearish implications. A close negative below the level of 43820 will attract more selling pressure. The daily MACD line is below the signal line, hinting that the weakness is not over. 

A negative opening on Monday and failure to recover by the end of the day, will also would signal weakness in the market. The Elder impulse system has formed a fourth consecutive neutral bar. In any case, the index close below the last week's low level of 43466 will be negative for the index. And it can test the level of 43300 and 43078. On the positive side, a close above the level of 43674 will be positive and can form a new lifetime high. The opening level and the first hour's price action are important for the weekly direction. 

 Strategy for the week 

The Bank Nifty closed strongly after recovering almost 400 points recovery from lower levels. A move above the level of 43965 is positive, and it can test the level of 44155. Maintain a stop loss at the level of 43890. Above the level of 44155, continue with a trailing stop loss. But, a move below the level of 43890 is negative, and it can test the level of 43600. Maintain a stop loss at the level of 44000. Below the level of 43600, continue with a trailing stop loss.