Bank Nifty: 17,950-18,200 zone likely to act as crucial resistance

Bank Benchmark index-Bank Nifty has lost almost 1,555.05 points or 8.25 per cent in the last five trading sessions. Further, out of five trading sessions, Bank Nifty has ended in red for four trading sessions. On the weekly chart, index formed a sizeable bearish candle, carrying a lower high and lower low as compared to its prior bar.

The index is trading below its long and short-term moving averages, i.e. 20-day EMA, 50-day EMA, 100-day EMA and 200-day EMA. The leading indicator, 14-period daily RSI, is currently quoting at 35.45 and it is trading below its nine-day average. The weekly RSI is in a super bearish zone. The daily and weekly MACD stays bearish as it is trading below its zero line and signal line. Moreover, on the directional index, the bearish strength is higher than bullish strength as +DI is much below -DI.

Going ahead, the zone of 17,950-18,200 is likely to act as a strong resistance for the index as it is the confluence of 38.2 per cent Fibonacci retracement level of its recent downward move, started from the high of 20,122.25 and short-term eight-day EMA level.

The derivatives data suggest that among Bank Nifty Calls, the 18,000 strike price is the most active call and among Bank Nifty puts, 17,000 strike price is the most active put for May monthly series. Open interest wise put-call ratio (PCR) is at 0.55 for May monthly series.

For May monthly expiry, the highest call open interest is at 18,000 strike with 8,44,720 OI, followed by 19,000 strike with 6,65,620. On the put side, 16,500 strike has 3,33,240 open interest, which is the highest. The highest change in open interest was seen at 18,000 call of May monthly expiry with 5,18,980 OI and on the put side, 16,000 put has witnessed the highest change in open interest with 1,90,440 OI. For May monthly expiry, the total call open interest is 63,19,540 and the put open interest is 35,08,920. The current derivative data suggest that the Max Pain is at 17,500.