Hot Stocks | M&M Financial Services, Axis Bank two sell calls for short term

Nifty plunged 2.21 percent on September 21, which is the highest one-day fall since May 18, 2020.

Bank Nifty continued to underperform and plunged 3.36 percent to close at 21,290. Bank Nifty has reached the lowest level since August 3, 2020, while Nifty is at the lowest level since August 14.

Nifty attempted a recovery but failed to surpass the high, which was made on August 31. So, the bearish engulfing pattern registered on the week ended September 4 is intact and bearish implications of the same still hold.

The level of 11,794 seems to have become the medium-term top for the Nifty.

Technicals are indicating that Nifty is headed for the healthy correction this time. The index failed to hold above the 50 percent retracement of the recent recovery seen from 11,185 to 11,618.

This setup shows that recent recovery from 11,185 was just a dead cat bounce in the overall down-trend.