Bank Nifty began today’s session with a gap-down at 51,365 versus yesterday’s close of 51,689. The index is currently hovering around 51,370, down 0.6 per cent at the end of the first hour of today’s trade.
The advance/decline ratio of the index stands at 2/10, showing a bearish bias. Bandhan Bank and HDFC Bank, up 0.4 and 0.15 per cent respectively, are the gainers. Federal Bank and Bank of Baroda are the biggest losers by depreciating 2.3 and 2 per cent respectively.
Nifty PSU Bank has lost 1.5 per cent so far whereas Nifty Private Bank is down 0.6 per cent. Therefore, broadly, the public sector banks seem to be facing relatively more downward pressure so far today.
Bank Nifty futures
Bank Nifty futures (September contract) opened today’s session lower at 51,535 versus yesterday’s close of 51,834. It is now trading at 51,640, down 0.4 per cent.
Yesterday, the contract closed above a resistance at 51,750, a bullish signal. Despite this, Bank Nifty futures opened with a gap-down today.
However, the contract remains above a support at 51,350. Moreover, it is currently trading near a trendline support.
Therefore, the bias remains bullish. We expect the Bank Nifty futures to recover from the current level and touch 52,000, a resistance. Subsequent resistance is at 53,000.
But if the contract slips below 51,350, the near-term outlook will turn weak, potentially leading to a decline to 50,800, a support. Next support is at 50,000.
Trading strategy
Buy Bank Nifty futures now at 51,640. Add longs in case the price slips to 51,400. Place stop-loss at 51,300. Book profits at 52,000.
Supports: 51,350 and 50,800
Resistance: 52,000 and 53,000