Technical Bits: Bank Nifty forms Three Black Crows pattern

The banking benchmark index Bank Nifty opened the trading session on a positive note. Thereafter, it soon pared it morning gains and traded in a capped range. However, in the last leg of the session, it moved lower and ended the session below the 29,500 mark with a loss of 0.70 per cent. The index has formed the Three Black Crows candlestick pattern.

The Three Black Crows candlestick pattern is a bearish reversal candlestick pattern. The pattern occurs when bears overtake the bulls during three consecutive trading sessions. The pattern shows on the pricing chart as three bearish long bodies candles with short or no shadows. This pattern usually indicates a weakness in an established uptrend and the potential emergence of a downtrend.

The 14-period daily RSI is currently quoting at 48.38 and it is trading below its 9-day average. The daily MACD stays bearish as it is trading below its zero line. Going ahead, the 50-day Exponential moving average, which is placed around 28,978, is likely to act as immediate support, while on the upside, the zone of 29,775-29,900 is likely to act as a resistance level.

Derivatives data suggests that among Bank Nifty Calls, the 30,000 strike price is the most active call for the April 25, 2019 weekly expiry. Whereas among the Bank Nifty Puts, 29,500 strike price is the most active Put for April 25, 2019 weekly expiry. For the April 25, 2019 weekly series, the maximum open interest (OI) outstanding for Calls were at 30,000 strike price and that for Puts were at 29,500 strike price.