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Gains were seen in PNB, IndusInd Bank, AU Small Finance Bank, and SBI, while ICICI Bank, Axis Bank and IDFC First Bank saw some selling pressure.
The index recouped losses as it bounced back after retesting its 200-DMA placed at 44,650 on the daily chart. Now, a close above 45,500 levels could trigger a short-covering move, suggested experts.
“After a brief downturn, the bulls made a strong comeback, successfully defending the crucial support level of 44,500, where fresh put-writing activities were observed. Despite the rebound, the index is still navigating a downtrend,” said Kunal Shah, senior technical & derivative analyst at LKP Securities.
“A potential pullback rally towards the 45,500 mark is anticipated. However, a significant development would be the index closing above 45,500, triggering further short-covering moves towards the 46,000 level, characterised by the highest open interest on the call side,” he said.
What should investors do?
The Nifty Bank opened lower in morning trade to retest its long-term average and quickly bounced back towards 45,485. But, it failed to hold on to the momentum and closed with marginal gains but above 45,000.
The index is likely to consolidate in a range in the next few trading sessions, but it still underperformed the Nifty50, which closed with gains of over 200 points.
The index is heading towards oversold levels; hence, a pullback could be on the cards. But the broader trend could still be bearish.
The daily Relative Strength Index (RSI) is at 32.9. RSI below 30 is oversold and above 70 is considered overbought, Trendlyne data showed. The daily MACD is below its Signal and Center Line, this is a strong bearish indicator.
“Bank Nifty also opened the gap down and consolidated for the day closing marginally in the green. We expect the consolidation to continue going ahead in the range 44,500 – 45,750,” said Jatin Gedia – technical research analyst at Sharekhan by BNP Paribas.
“Minor degree pullback towards 45,460 – 45,810 should be used as a selling opportunity. On the downside, we expect the Bank Nifty to drift towards 44,500 – 44,400 from short-term perspective,” he added.
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(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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