Bank Nifty Forecast and Trend Analysis for Next Week, 21–25 August: The Indian equity market experienced a downward trend this week due to weak global cues. The benchmark indices, Sensex, Nifty 50, and Nifty Bank, traded lower throughout the week, with Bank Nifty falling below the critical level of 44000.
Movement of the Bank Nifty This Week
Last week, the Bank Nifty’s share price stayed mostly unchanged, with a small decrease of 0.78%. It traded within a narrow range, reaching a low of 43600.35, a high of 44212.75, and closing at 43851.05.
Bank Nifty Forecast for Next Week (21st to 25th, August 2023)
Based on a careful analysis of Bank Nifty’s multiple time frames, it is evident that the index is currently in a downtrend. The daily chart, however, suggests a temporary pause in selling. It indicates a bearish reversal in the upcoming week.
Nifty Bank Share Price Chart
For Nifty Bank to stay in positive territory, it needs to respect this week’s lowest point. If it drops below 43600, it might continue to fall toward the important support levels of 43300–43000. Specifically, if it goes below 43300, there could be intense selling pressure, leading to a decline of around 1000 points.
If Banknifty breaks above the 44000–44100 resistance zone, it could signal a bearish reversal for the upcoming week. If this happens, Nifty Bank may also reach the 44800–45000 range.
The Nifty Bank is expected to face strong resistance around the 44400–44500 level. Because the area acted as the neckline of a recent “head and shoulders” pattern on the daily chart.
Until either 44000 or 43600 is breached, the trend is likely to remain indecisive and lackluster. During this period, active F&O traders, particularly scalpers and intraday players, may find opportunities to profit.
Nifty Bank Support and Resistance for Next Week
| S3 | S2 | S1 | Pivot Point | R1 | R2 | R3 |
|---|---|---|---|---|---|---|
| 42,951.00 | 43,275.70 | 43,563.40 | 43,888.10 | 44,175.80 | 44,500.50 | 44,788.20 |
Bank Nifty Options Chain Data
Based on the option chain data of Bank Nifty, the outlook for the upcoming week looks negative. Traders have taken more short positions in call options and long positions in put options. The highest open interest in calls and puts is seen at 44000 and 43800, respectively. But the immediate range of the Bank Nifty is expected to be between 43600 and 44100 as per price actions of this week.
A breakout outside of this range could bring new levels for the index, but the data suggests a higher possibility of a bearish trend for next week as well. However, it’s important to consider price action for a clearer outlook and trend.
Bank Nifty’s Put-Call Ratio (PCR) and Outlook
Put-Call-Ratio (PCR) for the Bank Nifty is 0.77, which is negative. But if the index keeps falling the next week, it’ll move into an oversold level. As a result, betting on a bounce will be profitable when the Nifty Bank declines.
Also read: Banknifty Index: How to Use it to Earn Money
What Factors Will Impact the Bank Nifty Next Week?
The upcoming week holds several crucial factors that are likely to have a substantial impact on Bank Nifty. Next week, the Indian market will take cues from geo-political tensions, crude oil prices, USD/INR rates, the US 10-year bond yield, and global equity markets. The India Vix will also impact the overall volatility in the market ahead of the August monthly F&O expiry.
The trend of the market will also depend on the activity of Foreign Institutional Investors (FIIs). In August, FIIs were selling consistently, which impacted the market indices. To boost market sentiment, it will be important to see if FIIs start buying next week.
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