26 May 2025 : Bank Nifty Analysis: Doji Candle Alert and RSI Divergence Insight.
Bank Nifty Analysis: Doji Candle Alert and RSI Divergence Insight.
Is It a Doji?
Current candle characteristics are visible:
- Small real body (open and close prices are quite close)
- Wicks on both sides (upper and lower shadows present)
- Forming near the top of a consolidation zone
Yes — as of now, it resembles a Doji or a spinning top pattern.
But final confirmation only happens at market close, because intraday movements can still widen the body.
Meaning of Doji Here:
A Doji at resistance after a sharp uptrend and consolidation indicates indecision between bulls and bears.
If it remains a Doji or forms a small-bodied candle at close:
- It can warn of trend exhaustion
- Or suggest a pause before a breakout
Tomorrow’s price action would be crucial.
Trading Tip:
- If the next candle breaks above 55,800, a bullish candle breakout will be confirmed. Remember, Doji do not always gives reversal.
- If breaks below 55,000 with volume, potential short-term pullback.
Charting Pattern Observations:
Strong Uptrend Structure:From mid-March 2025, Bank Nifty initiated a sharp rally, making consecutive higher highs and higher lows — classic uptrend structure.
Consolidation / Range Formation:
Post the steep rise in April, prices have entered a consolidation zone between 54,800 and 55,800.
This suggests market indecision, typically seen before a breakout or breakdown.
Symmetrical Triangle / Flat Base Pattern:
The candles are showing signs of tightening range near the top, hinting at a potential flat base breakout or a symmetrical triangle breakout if the upper resistance of 55,800 is convincingly crossed.
Key Levels to Watch:
| Level Type | Price Zone |
|---|---|
| Immediate Support | 55,000 - 54,800 |
| Breakout Resistance | 55,800 |
| Major Trend Support | 54,300 |
| Next Upside Target (if breakout) | 56,500+ |
Bias & Outlook:
- Positive Bias till above 55,000.
- Watch for Breakout at 55,800.
- A strong daily close above this will indicate continuation of the uptrend, targeting 56,500 - 57,000 zone.
- If it breaks below 54,800, then short-term weakness may pull it down to 54,300.
RSI Divergence Check (if applicable)
If you add RSI here and see a lower high on RSI while price makes higher highs, it would be a bearish divergence warning of trend exhaustion.
If RSI is confirming price moves, the breakout chances are stronger.
Trading Plan Idea:
Breakout Buy:
- Above 55,800
- Stop loss: 55,200
- Target: 56,500 - 57,000
Short-term Sell:
- Below 54,800
- Stop loss: 55,200
- Target: 54,300
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