In December 2022, Bank Nifty reached its peak around the range of 43800-43850, followed by a corrective descent. This retracement tested the 50-week Moving Average (MA) before resuming its ascent. By May of this year, the index revisited the prior resistance and in the subsequent month, it achieved a breakout.
The initiation of this breakout instigated a robust upward momentum, culminating in a peak at approximately 46370 levels. Subsequently, Bank Nifty recorded four consecutive weeks of negative closure. At present, the index finds itself at a pivotal juncture, where the erstwhile resistance has the potential to serve as a substantial support level, thus fortifying the trajectory of Bank Nifty’s movement.
Nonetheless, it’s noteworthy that maintaining a position above the levels of 43600-43700 in terms of weekly closure carries utmost significance. A breach below these levels on a weekly closing basis could potentially induce further vulnerabilities. Therefore, the index’s ability to sustain its elevation hinges upon its ability to stay above the mentioned levels in the context of weekly closures. This juncture calls for careful observation and analysis to ascertain the index’s future course of action. It’s important to note, however, that this narrative is presented as an informed viewpoint rather than explicit advice.