Bank nifty opened gap down at 40977 tried to close the gap till 9.35 but broke down, made an interim low at 10.00 and then tried to close the gap again till 12.35 but failed. The price action from 12.40 to 14.20 was the only realistic move made by bank nifty this week. Imagine when the global set up is very poor and our Nifty50 major index is showing lack of strength - bank nifty is trying to be the lone wolf & attempting to take out the all time highs.
The move that had to come yesterday - came today. In spite of all that bank nifty did not break the gap low set on 14th Sep whereas Nifty50 has deep dived another 1.5%
Bank nifty compared to Nifty is showing immense resilience, and is trading much above the bear channel, whereas nifty has just fallen below the descending channel top.
Bank nifty broke the support line 40689 for a brief period and then rallied and closed just higher. Breaking one support line does not mean that the index has reversed, but its a sign that we could be cautious in the days ahead.
If you look at the CE options volume today, there was again a surge in volume - could be attributed to the heavy shorting sensing that bank nifty has limited upside. The most important factor here is that the bears have been beaten out of shape by the bulls this week, even when the bulls did not have the conviction to move higher. The fairy tale moves on 14th Sep is a reminder on how the bears got whipped.
Nifty50 just entered the descending channel. (green sloping line)
5mts charts when viewed for previous days together does not show a reversal - yet.
1hr chart does not show bearishness unless 39317 is broken
The daily chart does not show bearishness unless 38682 is broken
The weekly candle does not show bearishness, but the current candle may become a shooting star (encircled in red) if the price action for the next week is held below 40200. If yes then its a sign of bearishness.
Bank nifty important support and resistance lines
s1:40689, s2: 40142
r1: 41312
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