Below research shows that sometimes a simple observation of particular stock or index can help in understanding its next move. The following research was published today in the morning. Bank Nifty managed to open at 25722 and made a high at 26073 levels thereby maintaining its previous structure and finally closing on a positive note at 25898 levels.
Bank Nifty daily chart as on 24th May 2018
Following is the gist taken from “The Financial Waves STU” dated 24th May 2018
Bank Nifty had been stable in the first half of the trading session but slipped by almost 300 points from higher levels and closed on a negative note making a Gravestone Doji candlestick pattern. SBI, Bank of Baroda and ICICI kept the banking index afloat in the start but they also cracked by more than 1%. The options data prior to today’s expiry suggests there is support area at 25500; the put option of this strike has highest open interest. The highest open interest in call options is at strike price of 26000 so this will be an important resistance on upside.
As shown on daily chart, prices have been falling from past 7 consecutive days. It has failed to take out the prior bar high which keeps the tone negative. One can stay short as long as previous high of 25900 is intact on upside. Upon close observation we found that usually bank nifty witnesses a fall of 7 days and then a positive move on 9th day. So break and close above 26000 will result into positive move.
In short, Bank Nifty is negative use any rallies to create short positions. The next level to watch on Bank Nifty would be around 25460 and let us see if same gets protected or not.
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