Bank Nifty: 27050-27000 likely to act as resistance

The popular index Bank Nifty opened gap-down on Tuesday and formed sizeable bullish candle around its short-term support zone of 25650-25600, which is the 50 per cent Fibonacci retracement level of its entire upward move starting from the low of early October to the high of December 3,2018.

After over 1,300 point rise from the low of Tuesday, the index witnessed some profit-booking at higher levels and formed two small body candle with shadows on either side.

The 14-period day RSI of Bank Nifty is facing difficulty to cross the 60 mark. However, the volumes and oscillators are too poor to suggest any momentum. For the near-term, it is expected that price will consolidate near short-term resistance zone of 27,050-27,000 while for any immediate decline the long-term moving average, i.e. 200-day EMA is likely to act as support zone, which is currently placed at 26,069 level.

Derivatives data suggests that among Bank Nifty Calls, 27,000 strike price of the December 20, 2018 weekly expiry is the most active Call. Whereas among Bank Nifty Puts, 26,500 strike price of the December 20, 2018 weekly expiry is the most active Put. For the December 20, 2018 weekly series, the maximum open interest (OI) outstanding for Calls were at 27,000 strike price and that for Puts was at 26,500 strike price.