Bank Nifty, after tumbling nearly 8 per cent yesterday, began today’s session with a gap-up at 47,487 versus yesterday’s close of 46,929. However, after marking a high of 47,502, the index declined and is now hovering around 46,680, down 0.5 per cent.

Supporting the bearish inclination, the advance/decline ratio of Bank Nifty stands at 4/8. Kotak Mahindra Bank is the top gainer by advancing 2.6 per cent whereas Bank of Baroda, down 3.8 per cent, is the top loser.

The public sector banks seem to be facing downward pressure today and consequently, the Nifty PSU Bank index is down 3.2 per cent. On the other hand, Nifty Private Bank is flat so far today.

Bank Nifty futures

Bank Nifty futures (June contract) opened today’s session higher at 47,400 as against yesterday’s close of 47,089. It gave up the gains and is now hovering around yesterday’s closing level.

The contract has a support at 46,780. A breach of this can open the door for a fall to 46,200, a support. Below this, Bank Nifty futures has a support at 45,800.

That said, in case there is a recovery, the contract is likely to face resistance at 47,700 and 48,000. A breakout of 48,000 will be good for the bulls. Notable resistance above 48,000 is at 49,000.

Trading strategy

Stay out for now. Go long with a stop-loss at 47,300 when the contract breaks out of 47,700. Book profits at 48,800.

But if Bank Nifty futures slip below 46,780, initiate a fresh short position. Target and stop-loss can be at 46,200 and 47,050 respectively.

Supports: 46,780 and 46,200

Resistance: 48,000 and 49,000

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