Bank Nifty opened today’s session marginally lower at 49,751 versus yesterday’s close of 49,781. But then the index recovered and is now hovering around 49,850, up 0.15 per cent by the end of the initial hour of trading.
The price action shows that the banking index has been staying sideways since Friday and it has not found direction yet.
That said, the advance/decline ratio now is giving Bank Nifty a positive bias as it stands at 9/3. Punjab National Bank, up 1.3 per cent, is the top gainer whereas Kotak Mahindra Bank, down nearly 0.8 per cent, is the top loser so far today.
Within the banking space, the public sector banks are outperforming their private peers today. Consequently, Nifty PSU Bank is up 0.7 per cent whereas Nifty Private Bank is up 0.1 per cent.
Bank Nifty futures
Bank Nifty futures (June contract) began today’s session slightly lower at 49,640 as against yesterday’s close of 49,732. The contract is now trading at 49,960, up 0.5 per cent.
The chart shows that Bank Nifty futures is trading in the 49,600-50,300 range. So, the next swing in price will be based on the direction in which the contract moves out of this price band.
A breakout of 50,300 can lift the contract to 51,500 and then to 52,000. On the other hand, a break below the support at 49,600 will open the door for a potential decline to 49,000, a support. Subsequent support is at 48,800.
Trading strategy
Stay on the fence. Take trade along the direction of the break of the 49,600-50,300 range.
Supports: 49,600 and 49,000
Resistance: 50,300 and 51,500