Bank Nifty defies opening losses- find out the key levels to watch out for!

5paisa Research Team 4th May 2023 - 09:50 am

The Bank Nifty opened with a big gap down and recovered the opening losses. It tested the last Friday's breakout level and closed higher as it recovered over 200 points from the day's low. It ended the six-day rally with a small decline.

Though it ended six-days rally, it formed a bullish candle on the daily chart as the close was greater than opening level. Volumes were lower than the previous day. Interestingly, it is still trading above its key moving averages and the 20DMA has managed to crossover the 100DMA and with this all the key moving averages like the 20, 100 and 200DMA are in desired sequence and in rising trajectory. In the short term, the 5EMA, is an important moving average to keep an eye on as long the index hold its 5EMA, be with bullish bias.

The RSI is in an extremely overbought condition. There is no major consolidation in the rally from March 16. The MACD histogram shows a decline in momentum. The Stochastic oscillator is sustained in an extreme zone. As it protected the day's low and closed near the high, we cannot see any major sign of weakness for now. Only a close below the level of 43078, we may see some profit booking. A move above the level of 43355 is positive. For now, stay cautiously optimistic.

Strategy for the day

The Bank Nifty erased its opening losses and closed almost flat. A move above the level of 43355 is positive, and it can test the level of 43468. Maintain a stop loss at the level of 43290. Above the level of 43468, continue with a trailing stop loss. But, a move below the level of 43255 is negative, and it can test the level of 43078. Maintain a stop loss at the level of 43355. Below the level of 43078, continue with a trailing stop loss.

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5paisa Research Team

Disclaimer: Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.

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