Bank Nifty opened today’s session with a gap-down at 53,794 versus yesterday’s close of 53,969. The index is now hovering around at 54,040, up 0.15 per cent.
The advance/decline ratio stands at 3/9, showing the index a bearish bias. HDFC Bank, up 1.1 per cent, is the top gainer whereas Punjab National Bank, down 3 per cent, is the top loser.
Nifty PSU Bank has lost 1.3 per cent whereas Nifty Private Bank has gained 0.2 per cent. Therefore, private banks are clearly outperforming the public sector peers.
Bank Nifty futures
Bank Nifty futures (October contract) opened today’s session lower at 54,220 versus yesterday’s close of 54,303. It is now trading at 54,300.
The chart shows that Bank Nifty futures retains the uptrend and is likely to go up from here. The contract can rally to 55,200 in the near-term.
That said, there is a chance for Bank Nifty futures to retrace to 54,000 before beginning the next leg of upswing.
The price band of 53,800-54,000 is a support. A breach of 53,800 can turn the outlook bearish. Support below 53,800 is at 53,500. However, as it stands, the likelihood of a fall below 53,800 is low.
Trading strategy
Buy Bank Nifty futures if it breaks out of 54,500. Target and stop-loss can be 55,200 and 54,200 respectively.
Alternatively, if Bank Nifty futures decline from the current level of 54,300, go long at 54,000 with a stop-loss at 53,700. When the contract touches 54,500, revise the stop-loss to 54,200. Exit at 55,200.
Consider carrying the trade over to the next few sessions.
Supports: 54,000 and 53,800
Resistance: 55,200 and 55,500