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On Friday, Bank Nifty closed at 39,395, 221 points lower than the previous day’s close. As discussed earlier, Bank Nifty broke through the resistance level but was unable to sustain it, and the market closed below that level on the next trading day, leading to a slide down to the lower level.
It’s important to remember that we shouldn’t immediately make a position after a breakout. Instead, we should wait for the next trading session to see if Bank Nifty closes above the breakout level before considering a position.
Candlestick pattern analysis reveals that in the daily timeframe, Bank Nifty has strong support at 38,923. If Bank Nifty closes below this level, we may see more downward movement, and the next support levels are at 38,000 and 37,639. On the upside, strong resistance is at 39,752 and 40,000. If Bank Nifty closes above 40,000 for two consecutive trading sessions, then it might be time to consider a position.
In the 15-minute timeframe, the candlestick pattern analysis indicates that the range between 39,752 and 39,844 is a strong resistance range, while 39,456 is a strong support level for intraday trading.
Option chain analysis shows that maximum PUT writing is at 39,000 and 38,500 levels, which act as strong supports for Bank Nifty, while maximum CALL writing is at 39,500, 40,000, and 40,500 levels, which act as strong resistance levels for the market.
For Monday’s trading session, there are a few potential trade setups to consider:
- If Bank Nifty opens flat in the range of 39,300 to 39,500, spends some time in this range, and breaks the previous day’s low at 39,300 and closes the candle below this level, the first target is at 39,190, followed by the second target at 39,064, and the third target at 38,897.
- If Bank Nifty breaks the strong resistance level of 39,533 on the upside, consolidates for some time in this range, and then closes above 39,575, the first target is at 39,674, and the second target is at 39,752.
- If the market opens with a large gap up or down, it’s best to wait for proper price action and let Bank Nifty come to the setup before making a trade.
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