Nifty and Bank Nifty Trading Strategy for October 11, 2023

Nifty View:

With renewed buying, the Nifty moved above the previous week’s high, forming a strong bullish candle backed by higher volume. Volumes were higher than the last two days but still below the average. It closed decisively above the 50 DMA. Additionally, it moved above the 38.2% retracement level of 19,673, which is the pullback target. If the index sustains above this level, the immediate target is the 20 DMA of 19,771, and the 50% retracement level of 19,778 is at a similar level. The RSI moved above the prior swing high but remained neutral. The MACD has turned upwards, showing improvement in momentum.

The Nifty formed a higher low and higher high candle, which is a bullish set-up. However, only a decisive move above 19,778 will confirm the continuation of the rally. Currently, the Bollinger bands are moving horizontally, and the 20 DMA is also flattened, indicating that consolidation will likely continue. The intraday swing is becoming the new normal. The Nifty has erased all the losses of the previous days. As the index is still below the 20 DMA, maintaining a neutral bias is advisable. Taking fresh leveraged positions may jeopardize strict risk management.

Nifty – Strategy for the day:

The Nifty closed higher with increased volume. A move above 19,690 is positive, and it can test 19,766. Maintain a stop loss at 19,640. Above 19,766, continue with a trailing stop loss. Conversely, a move below 19,640 is negative and can test 19,584. Maintain a stop loss at 19,690.

Bank Nifty View:

The Bank Nifty has formed a strong bullish candle with a gain of over 1 percent. It faced resistance at the 44,500 zone for the second time in the last three days. The volume is higher than the last two days. It closed above the monthly VWAP. The RSI has found support at the 40 zone thrice in the last eight days. The MACD line has flattened. It is still below the 23.6% retracement level of the prior downswing. The index remains 0.74% below the 50 DMA and 1.19% below the 20 DMA, with both averages in a downtrend. If the index moves above the 50 DMA (44,692), it can test the 20 DMA of 44,894. The Elder’s impulse system has formed a neutral bar with today’s bullish candle. The Bollinger Bands have further widened; we may see a price retracement towards the 20 DMA if 43,800 is protected. To test the near 45,000 levels, the index must close above 44,400 decisively with volume support. The Stochastic RSI has given a bullish signal. As the expiry is approaching, we may witness more short-covering moves with high volatility.

Bank Nifty – Strategy for the day:

The Bank Nifty tested the resistance and closed near it. A move above 44,500 is positive, and it can test 44,790. Maintain a stop loss at 44,400. Above 44,790, continue with a trailing stop loss. Conversely, a move below 44,340 is negative and can test 44,160. Maintain a stop loss at 44,440.

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.