The Nifty Bank index closed below its crucial psychological level of 48,000 on Wednesday, and the next big support is placed at 47750-47500 levels.
The banking index fell 266 points to close at 47,781 while the Nifty50 rose 68 points to close at 22,597.
HDFC Bank and Kotak Mahindra Bank closed with gains while selling was seen in ICICI Bank, Axis Bank, SBI and AU Small Finance Bank.
The Nifty Bank seems to be stuck in a range where 20-DMA placed at 48,282 on the daily charts is acting as a strong resistance on the upside and on the downside 47000 has acted as a strong support for the past 10-11 sessions.
It closed below the 50-DMA placed at 47785 on the daily charts which suggests that momentum is on the downside. Now a break above the 20-DMA or a break below 47500 levels will dictate the trend, suggest experts.
“The Bank Nifty index witnessed a volatile trading session on the weekly expiry day. The index is still trading below its 20DMA, which is placed at 48,276,” says Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.
“A break above this level will lead to sharp short-covering moves towards the 49,000 mark. Currently, the index is stuck in a broad range between 47,500 and 48,300,” he said.
“A break on either side will result in trending moves. However, within this range, the view remains bullish, and dips should be utilized to buy the index,” recommended Shah.
The index opened higher, but it failed to hold on to the momentum and quickly pared gains to retest 47435 levels. It recouped losses to close at 47,781.
“The majority of the day market traded with negative bias amid low volatility, but things took turn in the last hour of the trade when significant volatility was witnessed with market making fresh intraday lows and making “V” shaped recovery and erasing more than half of the day’s loss,” says Bhavik Patel- Senior Research Analyst, Tradebulls Securities.
“Bank Nifty managed to close above its 50-day moving average giving some respite to bulls; however, momentum oscillator RSI_14 is leaning towards the bearish side as it has crossed below its neutral line of 50 and is trading around 48,” he said.
“Since the last 11 trading sessions, Bank Nifty is confined within the narrow range of 47,300 – 48,250. Any clear direction can only be anticipated once Bank Nifty trades outside this confined range,” highlighted Patel.
“Above 48,000, immediate resistance for Bank Nifty is at 48,250 while on the downside, 47,750 and 47,500 can be termed as support,” he recommends.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
