What does a sharp profit booking in the last leg of trade indicate for Bank Nifty?

Karan Dsij
/ Categories: Trending, Mindshare
What does a sharp profit booking in the last leg of trade indicate for Bank Nifty?

In the last leg of the trade, profit booking emerged and Bank Nifty slipped over 400 points from the day’s high, resulting in the formation of a shooting star kind of a candlestick pattern on the daily chart.

Bank Nifty opened around the 33,000 mark and made a low of 32,800 but at lower levels, buying interest was seen. As a result, the index made an intraday high of 33,594 and resisted around the 10-DMA.  

In the last leg of the trade, profit booking emerged and Bank Nifty slipped over 400 points from the day’s high, resulting in the formation of a shooting star kind of a candlestick pattern on the daily chart. It took support at 38.2 per cent retracement level from the previous day's low. It failed to close above the moving average ribbon on a 75-minute chart. In fact, the open interest declined 4.2 per cent on a 1.55 per cent positive day, which indicates the unwinding of positions. The future volume is higher. The rally was mainly driven by PSU banks. Going forward, a move above 33,310 would turn out to be a positive one for the index. However, a move below 33,063 can be negative, which can test the level of 32,890. Maintain a stop-loss at 33,189.

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