Bank Nifty opened today’s session at 51,261 versus yesterday’s close of 51,289. The index moved up after opening and is now at 51,620, up 0.6 per cent.

The advance/decline ratio stands at 8/4, giving the index a bullish bias. Axis Bank, up 4.9 per cent, is the top gainer whereas HDFC Bank, down 0.4 per cent, is the top loser.

Nifty Private Bank has gained 1.2 per cent whereas Nifty PSU Bank is up 0.4 per cent. So, broadly, the private banks are outperforming the public sector peers.

Bank Nifty futures

Bank Nifty futures (October contract) opened today’s session at 51,400 versus yesterday’s close of 51,492. It is now trading at 51,800, up 0.6 per cent.

Although the price action so far appears bullish, the contract faces a resistance band of 52,000-52,200. Only a breakout of 52,200 can lead to a sustainable rally.

In case Bank Nifty futures break out of 52,200, it can move up to 52,800 and then possibly to 53,000.

On the other hand, if the contract falls on the back of the barrier ahead, it can touch 50,500 in the near-term.

Trading strategy

Yesterday, we suggested going short on Bank Nifty futures at 51,480. We also suggested to short more when the price touches 51,800.

Since the contract is currently at this level, traders can initiate short again. So, the average selling price would be 51,640. Stop-loss can be at 52,200.

When the contract falls to 51,000 revise the stop-loss to 51,500. Tighten the stop-loss further to 51,100 when the price falls to 50,700. Exit at 50,500.

Consider holding this position over to next week.

Supports: 51,000 and 50,500

Resistance: 52,000 and 52,200

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