Tech view: Nifty Bank can slip up to 3%; check out the key levels

Till Nifty Bank is trading above 39,200 levels, one can expect the positive trend to continue. The index is currently trading at 30,628 or 1.40 per cent of the most crucial short-term support of 30,200 levels. The recent trades suggest a reversal around the same levels with efforts to absorb all the selling pressure arising in the range of 30,800 – 31,000. Thereafter, the next resistance stays at 31,350 upon which a short covering rally may result in a new high.

The 30,200 level is nothing but a 50-day moving average (DMA) that has high significance for short-term trading. A breach of 30,200 will not only give entry in the gap-up range of 30,111 – 29,559 levels but will hamper the positive sentiment. The technical indicator RSI (Relative Strength Index) has made a negative crossover along with MACD (Moving average convergence and divergence) which is heading towards the zero line downward as per the daily chart. CLICK HERE FOR DETAILED CHART VIEW

The bigger chart reveals the “double top” formation resulted in a recent correction. That said, a trend line breakout may strengthen the reversal, provided the index crosses 31,000 with decent volumes in the coming week.

F&O (futures & options) expiry of June series due this week and a formation of negative candle on the monthly chart will determine the next course of a trend. The index needs to breach its high to witness upside.  

The inability of the index to climb resistance levels of 31,000 and 31,350 may result in the index slipping lower towards its 100-DMA of 29,147.