BankNifty, October 25th
Channel Down Pattern in Bank Nifty: Possible End of Bearish Trend or Continuation?
On Friday, Bank Nifty broke below the neckline support of its double top pattern, leading to a sharp decline. This was an expected move, as the pattern had already indicated a potential downside breakout.
The ongoing downtrend has now formed a channel down pattern, which can be either a continuation or reversal pattern. However, given the current market sentiment, it is more likely that the channel down pattern will represent a continuation of the bearish trend.
The market is likely to make an attempt to rebound in the coming days, but it is important to note that this may be a false bounce. With the expiry of weekly options contracts approaching, we can expect to see increased volatility and trend reversals.
Therefore, it is advisable to wait for the trend to become clear before taking any positions. The crucial support and resistance areas are plotted on the chart below.
On Friday, Bank Nifty broke below the neckline support of its double top pattern, leading to a sharp decline. This was an expected move, as the pattern had already indicated a potential downside breakout.
The ongoing downtrend has now formed a channel down pattern, which can be either a continuation or reversal pattern. However, given the current market sentiment, it is more likely that the channel down pattern will represent a continuation of the bearish trend.
The market is likely to make an attempt to rebound in the coming days, but it is important to note that this may be a false bounce. With the expiry of weekly options contracts approaching, we can expect to see increased volatility and trend reversals.
Therefore, it is advisable to wait for the trend to become clear before taking any positions. The crucial support and resistance areas are plotted on the chart below.
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