Bank Nifty July Futures (44,829)
Bank Nifty index has come down sharply after Reserve Bank of India’s monetary policy announcement. The RBI kept the rate unchanged. The index has tumbled from just below 45,000 and is currently trading at 44,625, down 0.58 per cent. The advance/decline ratio is at 5:7 and it indicates broader weakness in the index. AU Small Finance Bank and ICICI Bank are down over a per cent.
Outlook
The struggle for the Bank Nifty index to breach 45,000 continues. This leaves the chances high for the index to test 44,300-44,200 on the downside in the coming sessions.
The index has to see a sustained rise above 45,100 to become bullish and rise to 45,400-45,500 levels.
Bank Nifty Futures
The Bank Nifty August Futures (44,829) is down 0.45 per cent. The contract is facing strong resistance in the 45,200-45,250 region. The contract looks vulnerable for a fall to 44,400. A break below 44,680 can trigger this fall.
On the other hand, the contract has to rise past 45,250 decisively to become bullish. Only in that case, the doors will open for a rise to 45,500 and higher levels.
Trade Strategy
Trader can go short on a break below 44,680. Stop-loss can be kept at 44,730. Trail the stop-loss down to 44,640 as soon as the contract falls to 44,610. Move the stop-loss further lower to 44,600 when the contract touches 44,570 on the downside. Exit the short positions at 44,520.
Supports: 44,680, 44,400
Resistances: 44,925, 45,250