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Bank Nifty Price action – Next Support zone is the temporary hope for Bulls

Market prices are always driven two by major emotions called as “Greed” and “Fear”, Out of the two Fear is more powerful than greed. Price action of Bank nifty is a recent example of this adage! In the last month (that’s during Jan 2018) Bank Nifty rallied from 24800 to an all-time high of 27600. When Government revised Long term capital gain tax policy in 2018 Budget, major investors especially FII’s started selling their holdings and Stakes in major stocks because of taxation fears, causing a Short term selloff in both Nifty and Bank nifty.

Followed by that, PNB Scandal came to media spot light which further intensified the fear of Investors. Bears took upper hand on Bank stocks, Market sentiment changed in an instant. Bank nifty took another beating and further tumbled downside. Recent market conditions can be incomprehensible for an average trader, but an astute Price action trader might had clearly focused on opportunities, trading setups and ignored noisy fluctuations.

Bank Nifty Price action in Daily chart

Price action at Next Support zone can be a temporary hope for bulls

Take a look at the Event spike formation that happened at 24900 few days after the budget and before the PNB scandal, the pattern movement would’ve trapped many uninformed traders who took long positions at that spot. I have written more about event spike pattern in one of my contents. A good price action trader would’ve faded movements like these and getting caught in the smart money traps.

Market participants are wondering like “how long would the prices drop?” The answer lies at the potential support zone around 24500 – 24000. Future market direction depends on how the prices are going to behave at this support zone; these levels are the temporary hopes for bulls, hence check the Price action to get insights.

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