Bank Nifty: Rising Wedge (Reversal) pattern in progress

Bank Nifty is displaying a Rising Wedge kind of pattern in progression for the last six weeks. The Rising Wedge is a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows. Bearish confirmation of the pattern does not come until the support line is broken in a convincing fashion. 

The price has reached near the apex point of the Rising Wedge pattern and in the next week, it is likely to give a breakdown. Ideally, volumes will decline as price rises and the wedge evolves. Expansion of volume on the support line break can be taken as bearish confirmation. 

The 14-period day RSI cooled off after touching 65 zone and at present, it's reading 58.75 and it has recently given a negative crossover. The stochastic has given negative crossover in the overbought zone which predicts a pause in the trend. The Rising Wedge’s high-low breakout points to watch out for the index are 27,860 and 27,250. Only a decisive close above or below these key levels would result in a trending move. 

Derivatives data suggests that among Bank Nifty Calls, 27,800 strike price of the January 17, 2019 weekly expiry is the most active call. Whereas among Bank Nifty Puts, 27,300 strike price of the January 17, 2019 weekly expiry is the most active Put. For the January 17, 2019 weekly series, the maximum open interest (OI) outstanding for Calls were at 28,000 strike price and that for Puts were at 27,000 strike price.