Bank Nifty fell nearly 3000+ points from the all-time highs and broke 25000 on Friday, but because of last half hour buying, it closed above 25000. Negative news is coming from the last few days which is making the conditions even worse.
There is a Bearish Flag Formation on the 4 hourly chart, if this bearish breakout happens the possible level is 22600 – 22400, which may act as a Fibonacci support zone on a weekly chart, if this support is broken the next level to watch is 21000 – 20500. This channel has broken first time since Feb 2016. This is the current expectation & it is my personal view. Please Do Your Own Analysis.
I also use Renko charts for identifying the trend and to find out the strong zone and where chances of the stock/index reversal are more. The setting for the Renko charts is given below
The Renko chart for the Bank Nifty is given below, I have plotted two DZ (Demand Zones) and two SZ (Supply Zones). One thing I want to add here is, I don’t trade on SZ & DZ plotted on the Renko chart, I only use them to avoid taking contra-positions near supply and demand zone like I will avoid taking long position near or in supply Zone or will avoid taking short position near or in the demand zone as this will reduce the chances of taking entry in wrong positions.
|Sr No||Script||Supply Zone||Demand Zone|
|1||Bank Nifty||27175 – 27050||23770 – 23650|
|27757 – 25655||24650 – 24515|
I will explain later what is Renko and what is supply and demand trading, how to use it in trading.
Moving Averages for BANK NIFTY:
All moving averages are calculated on closing basis. Please don’t consider it as a trading signal.