Bank Nifty strategy be with the trend!

5paisa Research Team 16th May 2023 - 10:59 am

Bank Nifty almost hit the exact previous lifetime high and registered the highest close ever. It opened on a flat note a rallied consistently towards it's all time high.

After breaking out of a five base, it rallied towards all time high level which was seen in December last year. The index closed at the upper Bollinger band. As the index is trading near uncharted territory, there is no visible resistance. But the negative divergence in RSI is a cause for worry. The MACD line is above the signal line again, signalled positive bias. A higher volume than the previous day supported the index rally.

Currently, the price structure is in a confirmed uptrend as the index is trading above it's all key moving averages. There is no weakness in any of the time frame. For now, continue with the trend. Only a close below Monday's low of 43666 will be negative for the index. Otherwise, continue with the positive view. On the upside, above Monday's high, it can test 44414. Continue to hold long positions above this level with a trailing stop loss.

Strategy for the day

The Bank Nifty ended the day with gain of 0.64% and it had formed a bullish candle carrying higher high and higher low. Though it has registered its highest closing, it has a formed a negative divergence in the hourly chart. But we recommend being with the trend and continue the long positions with trailing stop loss. For a fresh entry, a move above the level of 44090 is positive, and it can test the level of 44414. Maintain a stop loss at the level of 43909. But, a move below the level of 43900 is negative, and it can test the level of 43725. Maintain a stop loss at 44090. below 43725, 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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