Bank Nifty: 29,550 to 29,500 level likely to act as crucial support

The banking benchmark index Bank Nifty started the week with a minor upside gap and traded in a range with negative bias in the first half of the trading sessions. However, in the second half, the index came off about 515 points from the high point of the day and ended the day below 29,900 mark, down by 0.80 per cent. The price action formed a long bearish candle resembling a bearish engulfing candle. Among the constituents, Kotak Mahindra Bank was the top gainer, while on the flip side, Yes Bank and RBL Bank were the top losers on Monday.

Going ahead, the 20-day exponential moving average, which is placed around 29,530, is likely to act as immediate support, while the major support is placed around 29,150. On the upside, all-time high of 30,648.10 level will be a major hurdle for the index. The 14-period day RSI is quoting at 61.32 and it has recently given a negative crossover, which suggests a pause in the uptrend. Moreover, there has been a negative divergence between the daily RSI, daily stochastic and the index price movement, which suggests limited upside.

Derivatives data suggests that among Bank Nifty Calls, the 30,500 strike price is the most active call for the April 11, 2019 weekly expiry. Whereas among the Bank Nifty Puts, 29,800 strike price is the most active Put for April 11, 2019 weekly expiry. For the April 11, 2019 weekly series, the maximum open interest (OI) outstanding for Calls were at 30,500 strike price and that for Puts were at 29,500 strike price.