Bank Nifty Trading Strategy for Today – 18th September

For the past week, the Bank Nifty index extended its winning streak for the fourth consecutive week, logging robust gains of 2.38%, the highest weekly gains since mid-July. The index is now approximately 130 points away from its all-time high. On the daily time frame, the index formed a bullish candle as the closing price exceeded the opening price, resulting in higher highs and higher lows. This negated the bearish implication of the doji candle formation observed on Thursday. For the sixth consecutive day, the Bank Nifty closed above the Bollinger Bands, indicating that the trend is overextended in an impulsive manner. Volumes were above average on Friday. The expansion in the Bollinger Bands suggests that the index may consolidate before making a further move. The RSI is in overbought territory but does not show any divergence, while the MACD indicates strong momentum. Aside from the trend expansion, there are currently no signs of reversal. The Elder’s Impulse System has formed a strong bullish bar, and the Stochastic Oscillator is in an extremely overbought condition. The KST and TSI indicators are in a bullish setup. As long as the Bank Nifty forms a higher low candle, maintain a positive bias. Only a close below Thursday’s low of 45,801.50 could trigger some profit booking in the short term. On the upside, a move above the previous high of 46,370 would allow the index to enter uncharted territory. Regarding PSU bank stocks, they may continue to be bullish for some time.

Strategy for the day:

The Bank Nifty also traded sideways with volatility. A move above 46,370 is positive, and it could test 46,580. Maintain a stop loss at 46,100. Above 46,580, continue with a trailing stop loss. However, a move below 46,100 is negative, and it may test a level of 45,801.50.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.