Bank Nifty Analysis: Weekly Expiry on Thursday 23rd March 2023 with Candlestick and Option Chain Patterns

Bank Nifty traded in a sideways or seller’s market on Wednesday, opening within the discussed range but later sliding down to 39837. However, the market was not able to break the support and traded within the range of 39837 to 40050 for the entire day. The Bank Nifty closed at 39999, which is 104 points higher than the previous day’s close. Thursday, 23rd March 2023 marks the weekly expiry of Bank Nifty.

Candlestick Pattern Analysis

Analysis of Daily Time Frame

Upon analyzing the candlestick pattern on the daily timeframe, it was observed that Bank Nifty closed above the resistance of 39849. However, it was noted that in the past, Bank Nifty has not been able to sustain a breakout above an important resistance and has come down to lower levels. For this reason, if Bank Nifty closes the candle above 40147, only then it can be confirmed that the market is in an uptrend.

Analysis of 15 Minute Time Frame

Analyzing the candlestick pattern in the 15-minute timeframe for intraday purposes, it was observed that the level 39839 is strong support for the market, while the level 40050 is the strong resistance for the market.

Analysis of Option Chain Data

Analyzing the option chain of Bank Nifty, it was found that the maximum PUT writing is at the levels of 40000, 39500, and 39000, which act as support for the Bank Nifty. Meanwhile, the maximum CALL writing is at the levels of 40000, 40500, and 41000, which act as resistance.

Trade Setup for Thursday

1. If Bank Nifty opens flat or in the range of 39920 to 40050 and spends some time in this range, then breaks out in an uptrend and closes the candle above 40080, the first target is 40253, the second target is 40368, and the third target is 40461.
2. If Bank Nifty breaks out of the range in a downtrend and closes the candle below 39850, the first target is 39786, the second target is 39655, and the third target is 39523.
3. If the market opens with a large gap up, and Bank Nifty forms the shooting star with its first candle, then I am going to short the market with a small quantity. On the other hand, if the market opens with a gap down and the first candle forms the hammer, I am going to buy the CALL option.

Given that Thursday marks the weekly expiry of Bank Nifty and Fed news is also in the market, traders are advised to follow strict stop-loss rules.

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