Nifty and Bank Nifty Trading Strategy for October 17, 2023

Nifty View 

On Monday, the Nifty moved within a range and formed an inside bar. It oscillated around the 20 DMA and closed below it. The volumes were much lower over the last five days. The index has formed an indecisive candle on a lower time frame chart. Even on the daily chart, the Nifty has formed a candle with a negligible body and shadows on either side. Momentum is down across all time frames. The index is stuck between the Anchored VWAP support and resistance. The last hour of selling pressure shows traders’ risk aversion in carrying forward positions. As the inside bar formed, the Nifty must close on either side of Friday’s level. This means a close above 19805 will be positive, and below 19635 is negative. The Nifty has formed two lower-high candles. As mentioned earlier, Thursday’s high, 19843, is now the short-term swing high for all practical purposes. Only above this level will the market test the near all-time highs. The declining RSI indicates a decline in momentum. The MACD has been flattened for the last three days. On the downside, a close below 19635 will find the 50 DMA support at 19611. Below this support level, the Nifty may test the previous low. Overall, the price structure is damaged. Stay away from long positions; maintain a neutral to bearish bias.

Nifty – Strategy for the day

The Nifty closed near the day’s low, finding support at the rising trendline. A move above 19750 is positive, and it can test 19800. Maintain a stop loss at 19705. Above 19800, continue with a trailing stop loss. However, a move below 19720 is negative and can test 19680. Maintain a stop loss at 19750. Below 19680, continue with a trailing stop loss.

Bank Nifty View 

The Bank Nifty has formed another indecisive candle for the fourth consecutive day. It closed at the previous day’s low with volumes lower than the previous day. The index tested almost near the Anchored VWAP support level, closing just 247 points above the recent low. The Anchored VWAP support is at 43975. This 43796-975 support zone will be the deciding factor for a trend reversal. On the upside, it must close above 44356 for a short-term positive bias. For a reversal on the upside, it must close above the recent high of 44710. Otherwise, we may see more probabilities for a decline. The index is below the 50 and 20 DMAs, both of which are in a downtrend. It is also below the 100 DMA and is just 2.44% above the 200 DMA. The MACD is bearish and below the zero line. The RSI is near the 40 zone, indicating a decline in momentum. The Elder’s impulse system has formed a bearish candle after the 9th October low. All the other indicators are showing a negative bias. Maintain a negative bias.

Bank Nifty – Strategy for the day

The Bank Nifty has formed an indecisive candle. A move above 44255 is positive, and it can test 44395. Maintain a stop loss at 44200. Above 44395, continue with a trailing stop loss. However, a move below 44210 is negative and can test 44005. Maintain a stop loss at 44300. Below 44005, continue with a trailing stop loss.

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.