Bank Nifty: 30600 to 30800 level likely to act as crucial resistance

The Bank Nifty started the week with a minor upside gap. Thereafter, it soon pared its morning gains and traded in a capped range. However, the session ended above the 30300 mark with a modest gain. The price action on the daily time frame has formed a Spinning top candlestick pattern. The Spinning top candlestick pattern represents indecision about the future direction of the asset. Neither the buyers nor the sellers could gain the upper hand.

Among the Bank Nifty constituents, Federal Bank and Bank of Baroda were the top gainers, while on the flip side, Indusind Bank and Axis bank were the top losers on Monday.

Going ahead, on the downside, the immediate supports are seen around 29890-29630 levels as it is the confluence of 8-day EMA and 13-day EMA. On the upside, the Bank Nifty needs to sustain above the zone of 30800-30600 level to maintain its positive stance. If it is unable to surpass this level, then there are chances of the index entering a corrective to sideways phase. From the momentum indicators perspective, the 14-period daily RSI is currently quoting at 65.15 and it is trading above its 9-day average. The daily stochastic has given a negative crossover in the overbought zone which suggests pause in a trend.

Derivatives data suggests that among Bank Nifty Calls, the 31,000 strike price of November 07 , 2019 weekly expiry is the most active. Whereas among the Bank Nifty Puts, 30,000 strike price of November 07, 2019 weekly expiry is the most active. For the November 07, 2019 weekly series, the maximum open interest (OI) outstanding for Calls stands at 31,000 strike price and that for Puts at 29,500 strike price.