On Monthly chart, the Ratio of Banknifty/Nifty has been moving in upward trending channel since 2001.
In every correction the channel has acted as the support zone, as seen from the chart.
On previous occasions during the correction, the RSI indicator has held the levels of 35-40, which is said as support levels for Bull market corrections.
This time around the ratio is trading around the lower end of channel, but RSI is around the levels of 31.
If RSI fails to hold the levels of 35 on monthly closing basis then it is fair to say that we can have serious issues with this bull run of ratio chart.
For educational purpose.
In every correction the channel has acted as the support zone, as seen from the chart.
On previous occasions during the correction, the RSI indicator has held the levels of 35-40, which is said as support levels for Bull market corrections.
This time around the ratio is trading around the lower end of channel, but RSI is around the levels of 31.
If RSI fails to hold the levels of 35 on monthly closing basis then it is fair to say that we can have serious issues with this bull run of ratio chart.
For educational purpose.