Bank Nifty forms indecisive bar for third day in a row!

On Tuesday, Bank Nifty ended the day with miniscule gains of 0.16%. 

It opened at level of 43978.90 and closed at 43954.45 as the close was near about the open of the day, it resulted into a formation of a long-legged doji like candlestick pattern. This is the third consecutive indecisive bar on the daily chart. 

The index has been traded in the previous week's range for the last two days. A sharp decline in the last hour shows a massive profit booking before the expiry. The Rollovers have not picked up yet. They are below the three and six-month average and below the last month's same-day open interest. A series of indecisive or bearish candles indicate the lull before the storm. The next two days of trading will be very tricky, to trade. The index almost tested the previous day's high but finally closed lower. 

It is below the rising trendline for the second day. Though it is trading above the key moving averages, the momentum has completely waned. On a weekly and daily chart, the RSI is flattened. The MACD histogram shows an increased bearish momentum. The hourly MACD is about to give a sell signal. The hourly RSI is in a neutral zone. Tuesday's high of the 44095-43740 zone will be crucial for the next two days. Either side breakout will lead to a sharp move. Before the expiry, the index may witness high volatility, and the daily range will also increase.

Strategy for the day

The Bank Nifty closed within the moving average on the hourly chart. A move above the level of 43945 is positive, and it can test the level of 44142. Maintain a stop loss at the level of 43750. Above the level of 44142, continue with a trailing stop loss. But a move below the level of 43750 is negative, and it can test the level of 43560. Maintain a stop loss at the level of 43875. Below 43560, continue with a trailing stop loss.