Bank Nifty futures (45,980)

Bank Nifty opened today’s session slightly higher at 46,027, compared to yesterday’s close of 45,908. It is now trading at around 45,900, essentially flat for the day so far.

Interestingly, the advances/ declines ratio stands at 6/6, indicating a possible tug-of-war between the bulls and the bears.

Federal Bank, up 2.6 per cent, is the top gainer, whereas Axis Bank, down 2 per cent, is the top loser in the index.

So far today, the public sector banks are outperforming their private sector peers. While Nifty PSU Bank has gained 1.2 per cent, the Nifty Private Bank index is down 0.3 per cent.

Bank Nifty futures

Bank Nifty futures (February expiry) began today’s session higher at 46,250, as against yesterday’s close of 46,090. It is now trading at around 45,980, down 0.2 per cent.

The price action shows that Bank Nifty futures is struggling to surpass the resistance at 46,350. If there is another fall off this barrier, the contract could head south to 45,000.

But if the contract breaks out of 46,350, it will open the door for a rally to 47,000. A breach of 47,000 will turn the outlook positive.

Trading strategy                          

Since Bank Nifty faces a strong barrier, one can short the contract at 45,980. Place stop-loss at 46,500. When it falls below 45,500, tighten the stop-loss to 45,800. Book profits at 45,000.

Supports: 45,500 and 45,000

Resistance: 46,350 and 47,000

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