Bank Nifty slips below 200-DMA

The banking benchmark index, Bank Nifty slipped below its 200-DMA for the first time since October 17, 2019 after Union Budget speech. The price action formed a sizable bearish candle carrying lower high and lower low, in comparison to its prior bar. In the technical parlance, this formation indicates a downtrend continuation pattern. Among the constituents of Bank Nifty, RBL Bank and State Bank of India were the top losers on Saturday.

Going ahead, the immediate support for the index is placed at 29,628 level, which is 50 per cent Fibonacci retracement level of its prior upward move (26,643-32,613.10). On the upside, Saturday’s high of 30,918.60 will be a major hurdle for index. Among the momentum indicator, the 14-period daily RSI is currently quoting at 30.74 and it is trading in downward channel. The daily MACD stays bearish as it is trading below its zero line and signal line. Moreover, on the directional index, the bearish strength is much higher than the bullish strength as +DI is much below the -DI.

Derivatives data suggests that among Bank Nifty Calls, 31,500 strike price is the most active Call for February 06, 2020 weekly expiry. Whereas, among Bank Nifty Puts, 30,000 strike price is the most active Put for February 06, 2020 weekly expiry. For February 06, 2020 weekly series, the maximum Open Interest (OI) outstanding for Calls was at 32,000 strike price and, for Puts, it was 30,000 strike price.