Bank Nifty began today’s session with a gap-up at 50,133 compared to Wednesday’s close of 49,727. The index is now at 49,920, up 0.4 per cent so far today.
In the index 11 out of 12 stocks have moved up today led by AU Small Finance Bank, up 1.1 per cent. This is followed by IDFC First Bank, up 0.8 per cent. Punjab National Bank, down 1.1 per cent, is the only stock in the index that is in the red.
Nifty PSU Bank has gained nearly 0.6 per cent whereas Nifty Private Bank is up about 0.4 per cent. Thus, broadly, the stocks of public sector banks are performing better until now today.
Bank Nifty futures
Bank Nifty futures (August contract) opened today’s session higher at 50,250 versus Wednesday’s close of 49,955. It witnessed a sharp rally initially and marked an intraday high of 50,977.
However, on the back of the resistance band of 50,800-51,000, the bears dragged Bank Nifty futures lower. It is currently hovering around 50,120, up 0.35 per cent.
The contract has a support region between 49,850 and 50,000. This has been holding well since the beginning of the month and Bank Nifty futures has rebounded from this level before.
A rally from the current level can lift Bank Nifty futures back to 50,500 or even to 50,800. However, a breach of 49,850 can intensify the sell-off, possibly leading to a quick fall to 48,000, a strong base.
Trading strategy
Buy Bank Nifty futures at 50,020 and keep a stop-loss at 49,800. When the contract touches 50,320, revise the stop-loss to 50,100. Liquidate the longs at 50,800.
Supports: 50,000 and 49,850
Resistance: 50,320 and 50,800