Bank Nifty opened today’s session with a considerable gap-up at 47,946 versus yesterday’s close of 47,687. But after marking a high of 48,002 in early trade, the index quickly changed direction. It is now hovering around yesterday’s closing level.
Punjab National Bank, up nearly 1 per cent, is the top performer, whereas Bandhan Bank, down 4.2 per cent, is the top loser.
Broadly, public sector banks have faced higher selling pressure so far today compared to private banks. Thus, Nifty PSU Bank is down about 0.4 per cent, whereas Nifty Private Bank is down 0.1 per cent.
Bank Nifty futures
Bank Nifty futures (May contract) began today’s session higher at 48,048, as against yesterday’s close of 47,909. It marked a high of 48,175 in the first hour of the session, and then made a U-turn and is now trading at 47,840, down 0.15 per cent.
The chart shows clear signs of bearishness. We expect Bank Nifty futures to decline to 47,300, a support. Subsequent support is at 47,000.
On the other hand, if the contract recovers, it ought to break-out of the resistance at 48,200, in order to turn the outlook bullish. But at the moment, the probability of that remains low.
Trading strategy
Short Bank Nifty futures at 47,840. Add shorts in case it moves up to 48,000. Place stop-loss at 48,300. When the contract falls to 47,500, tighten the stop-loss to 47,800. Book profits at 47,300.
Supports: 47,300 and 47,000
Resistances: 48,000 and 48,200