Look at the two observations listed below:
1) On daily chart, Nifty finished as a green base-like candle and Bank nifty finished as a red base-like candle.
2) On daily chart, nifty's friday's lower low was nearer to thursday's low and high was much higher than thursday's high whereas for Banknifty, the lower low was significantly lower than thursday's low and higher high was just above thursday's high.
These two observations tell you about the weakness in Banknifty vis-a-vis Nifty. So if at all Nifty want to rise, Banknifty will not allow a wild rally. And if Banknifty is headed for fall other sectors/stocks will prevent Nifty from going much down. But this also means that Banknifty can freely fall. Now look at the main constituents of BNF. HDFC bank finished as lower low and lower high (closing just above 20 DEMA); ICICI bank finished as a perfect Doji candle with higher high and higher low;Axis Bank finished as a base-like red candle with slightly higher high and higher low and exactly same with Kotak Bank; SBI finished as a Doji red candle with higher high but lower low. These 5 banks constitute more than 80% of weightage of BNF. Does any of them inspire confidence for bulls? I am afraid no. So do not expect BNF to rally. It may fall or it may finish as a base like candle like it did on friday, allbeit with lower volatility (meaning lower range).
On chart, BNF hit 20 and 200 DEMA as resistances and came down. The selling area that I marked still holds good and the buying area too. I have adjusted the limits after friday's move. Currently the CMP is almost in the mid area between outer range of 27550 and 28600.
All the best. Happy trading.
1) On daily chart, Nifty finished as a green base-like candle and Bank nifty finished as a red base-like candle.
2) On daily chart, nifty's friday's lower low was nearer to thursday's low and high was much higher than thursday's high whereas for Banknifty, the lower low was significantly lower than thursday's low and higher high was just above thursday's high.
These two observations tell you about the weakness in Banknifty vis-a-vis Nifty. So if at all Nifty want to rise, Banknifty will not allow a wild rally. And if Banknifty is headed for fall other sectors/stocks will prevent Nifty from going much down. But this also means that Banknifty can freely fall. Now look at the main constituents of BNF. HDFC bank finished as lower low and lower high (closing just above 20 DEMA); ICICI bank finished as a perfect Doji candle with higher high and higher low;Axis Bank finished as a base-like red candle with slightly higher high and higher low and exactly same with Kotak Bank; SBI finished as a Doji red candle with higher high but lower low. These 5 banks constitute more than 80% of weightage of BNF. Does any of them inspire confidence for bulls? I am afraid no. So do not expect BNF to rally. It may fall or it may finish as a base like candle like it did on friday, allbeit with lower volatility (meaning lower range).
On chart, BNF hit 20 and 200 DEMA as resistances and came down. The selling area that I marked still holds good and the buying area too. I have adjusted the limits after friday's move. Currently the CMP is almost in the mid area between outer range of 27550 and 28600.
All the best. Happy trading.