Bank Nifty is continuing to get beaten down. The index has declined below the 51,000 mark today. It is currently trading at 50,610, down 1.38 per cent. The advances/declines ratio is at 2:10. This is very bearish.
Bank Nifty outlook
The fall below 51,000 is negative. The outlook is bearish. Immediate support is around 50,500. A break below it can drag the Bank Nifty index down to 50,000 and even 49,500 in the coming sessions.
The Bank Nifty index has to rise above 51,000 to get some breather. Only then it can rise back to 51,500-52,000 levels.
Bank Nifty Futures
The Bank Nifty July Futures (50,690) are down 1.38 per cent. Immediate resistance is at 50,800. Above that 51,200 is a very strong resistance which can cap the upside if a rise above 50,800 is seen. We expect the Bank Nifty index to fall to 50,300 in the coming sessions.
The price action thereafter will need a close watch to see if a bounce is happening or not.
Trade Strategy
High-risk appetite traders can go short now at 50,690 and 50,760. Keep a stop-loss at 50,820. Trail the stop-loss down to 50,610 as soon as the contract falls to 50,580. Move the stop-loss further down to 50,500 when the contract touches 50,400 on the downside. Exit the shorts at 50,340.
Supports: 50,300, 50,000
Resistances: 50,800, 51,200