Following is the Bank Nifty Daily Chart Analysis for 13th December 2023.
Bank Nifty has done a major rally in the last 2 weeks, and its holding up above all moving averages, trying to consolidate at 47K level. Upside target of 48K is still on. Momentum has been falling, but any reversal in momentum can rapidly take the price to 48K.
Till Bank Nifty closes below 10 day Simple Moving Average, traders should not take any major positions on the short side, or using Bank Nifty Puts. 46K level should act as a strong support, because 46,300 was the previous double top, which was recently broken, so its possible that Bank Nifty may go there to test support level.
Please see this trend line analysis on Bank Nifty lifetime chart. This is a log chart, which captures the life chart very well. In technical terms, it can be considered a “wedge breakdown” that happened in Feb 2020, which is always going to be a fast and powerful correction. In this case, Bank Nifty futures lost 50% of their value in 6 weeks.
Going ahead, as the chart suggests, Bank Nifty futures will face strong resistance on their next upmove above 37K. In fact, there is a zone of resistance between 37-40K. And above 40K, Bank Nifty futures will race towards 50K. The most importance question is this: can we consider the current correction to be over, and 16K as the base that won’t get broken? Looks like yes, that’s the case. However, we may see correction till 28K even as part of the upmove.