Bank Nifty caught between rock and a hard place; 21-EMA is crucial!

Bank Nifty took support at 21-EMA for the day, which is placed at 33,815. A decline below this will be negative for the index.

After a solid start, Bank Nifty registered an intraday high of 34,361; however, it fell from grace and declined sharply by 600 points from the day’s high. The sell-off in the afternoon session was very swift and sudden. The index formed a strong bearish candle as its closing was below the opening along with an upper shadow, which reflects a sharp sell-off from the day's high. 

Bank Nifty took support at 21-EMA for the day, which is placed at 33,815. A decline below this will be negative for the index. On an hourly chart, it closed in the moving average ribbon while the MACD is about to give a sell signal. The daily RSI fell below the zone of 50 again. With Tuesday's fall, the index seems to have halted its countertrend rally. Having said that, as long as it manages to hold above the 21-EMA, buy-on-dips would be the theme for intraday traders but with strict stop-loss. A move below 33,740 is negative and it can test 33,610. On the upside, the levels of 34,000 and 34,400 are likely to act as resistance.