The banking index fell 533 points to close at 47,487 while the Nifty50 saw a decline of 345 points to close below the 22000 mark. IDFC First Bank, PNB, HDFC Bank, and IndusInd Bank were among top losers while buying was seen in SBI and Bandhan Bank.
The index closed lower in six out of the last seven trading sessions. The selling pressure pushed the index below the 50-DMA mark which was placed around 47,600 levels.
“The Bank Nifty index remained under bearish pressure, breaching the crucial level of the 50-day exponential moving average (EMA) on a closing basis,” Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, said.
“The index is now eyeing its next immediate support at 47,400, and a breach below this level could intensify selling pressure towards the 47,050 mark, corresponding to the 100-day EMA,” he said.“On the upside, the index faces immediate resistance at 48,000, where aggressive call writing is observed. A decisive breakthrough above this resistance level may trigger short-covering moves towards the 48,500 mark,” recommended Shah.The Nifty Bank commenced trading on a bearish note and struggled to maintain momentum, experiencing a consistent decline throughout the session. However, it managed to regain some ground after testing the 47,400 levels.For Friday, 47,400 will be the crucial support for the index and a break below this could take it towards 47000 levels, suggest experts.
“Bears were clearly dominant and the strength of the sellers can be seen how they managed to close the index at the day’s low giving no respite to buyers,” Bhavik Patel- Senior Research Analyst, Tradebulls Securities, said.
“Any pullback seen in the market was too feeble and buyers could not stage any sort of recovery today. It seems after ‘Doji’ candlestick yesterday, buyers were unable to stop the downside momentum as the bearish trend continued,” he said.
Data suggests that a significant amount of call writing is being witnessed at the 48,000 strike price indicating immediate resistance at that level while put writing is seen at the 47,000 strike price which could be established as the next support.
“On the daily scale, buyers need to take the market above a 2-day high of 48,240 to trigger any sort of short covering. Now that Bank Nifty is below its 50-day moving average, a bearish trend is expected to continue till 47,000,” recommended Patel.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times)