Bank Nifty Likely to Correct on Monday, 18th Apr 2022


Bank Nifty OHLC on 13 Apr 2022

Bank Nifty was in a small range for the past four trading sessions. On Wednesday i.e 13th April 2022, bank nifty opened at 37887.30, 423.9 points above Tuesday’s close of 37463.40. It opened at the higher end of the range and gradually moved down to break 37500 near day’s closing. It eventually closed at the lower end of the range at 37463.40.

Bank Nifty (Spot) OHLC on 13 Apr 2022

Price action and Bank Nifty’s range for the past 5 trading sessions on 15mins chart:

What does Bank Nifty’s EOD Chart tell us?

As mentioned above, bank nifty is still within the small range. However, it has formed a bearish candlestick on Wednesday and closed near the lower end of the range.

RSI on daily timeframe is below 60 at 56.06 on spot and 55.72 in bank Nifty Apr futures, which is also indicating bearishness. Weekly RSI is below the daily RSI and monthly RSI is just above 60 at 60.54.

Also a red Volume bar was formed a volume of 4.19M which has almost engulfed the previous day’s green volume bar with a volume of 4.65M. This is also not looking good.


Bank Nifty Open Interest (OI)

Calls: The highest OI is at 38000 with decent volume buildup and the next highest open interest is seen at 38500, closely followed by 37500 strike price on the call side. The price of all the calls have fallen with an increase in OI suggesting short buildup on the call side.

Resistance Levels: 38040-60, 38500 (Charts + OI)

Puts: The highest OI on the put side can be seen at 37500, followed by 36500 strike price. The next highest OI is at 37000 which may act as support. The put premium have increased with an increase in OI suggesting Long buildup on the put side.

Support Levels: 37240, 36840 (Charts + OI)

Adding to the above points, HDFC Bank has posted its quarterly results and is not great which is also a negative for bank nifty.

Global Markets

  • NASDAQ has closed 2.15% lower
  • Dow Futures closed -124 points (-0.36%) lower at 34,358 on 15 Apr 2022.
  • SGX Nifty closed at 17300, down by 29 points.

Conclusion: Bank Nifty has been in a small range from the past five trading sessions. Considering OI data, chart study and other indicator bank nifty may correct on Monday i.e. 18th Apr 2022.

The upside potential is looking restricted, and one needs to be cautious. If there is huge gap down on Monday, avoid taking puts. Wait for a pull back near to 37500 and look to go short for the day.

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