Bank Nifty began today’s session with a gap-up at 50,612 versus yesterday’s close of 50,157. It slightly dipped after opening and is currently at 50,580, up 0.85 per cent at the end of the first hour of today’s trade.

All 12 stocks in the index are in the green led by IDFC First Bank, gaining 1.6 per cent. This is followed by Federal Bank, which has advanced 1.4 per cent. 

Nifty PSU Bank index has gained 0.7 per cent whereas Nifty Private Bank is up 0.9 per cent. Hence, the private sector banks are outperforming the public sector peers.

Bank Nifty futures

Bank Nifty futures (August contract) opened today’s session higher at 50,636 versus yesterday’s close of 50,206. It is now trading around 50,600, up about 0.8 per cent.

The contract is now trading near the resistance at 50,800. This barrier should be breached to turn the trend bullish. Until then, the bears will have an upper hand.

In case Bank Nifty futures break out of 50,800, it can see a rally to 51,600, which can extend to 52,000. On the other hand, if the contract declines on the back of the resistance at 50,800, it can retest 50,000.

Since the contract is trading near a resistance and that the trend has been bearish recently, traders can consider initiating short positions on Bank Nifty futures.

Trading strategy

Short Bank Nifty futures now at 50,600. Place stop-loss at 50,850. Book profits at 50,000.

In case the contract rallies and hits the above stop-loss, one can consider going long with a stop-loss at 50,400. Exit the longs at 51,900.

Supports: 50,000 and 49,800

Resistance: 50,800 and 52,000

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