Bank Nifty August Futures (50,751)

Bank Nifty index is attempting to recover from its intraday low. The index opened the day on a negative note and fell to a low of 50,149. From there it has recovered most of the loss and is now trading at 50,423, down 0.12 per cent. The advances/decline ratio is at 2:10. This has to reverse in favour of the advances to take the Bank Nifty index higher. Else the current bounce may not sustain for long.

Bank Nifty outlook

If the current bounce sustains, the Bank Nifty index (50,423) can extend the rise to 50,700 during the day. The region between 50,700 and 50,750 is a strong resistance zone. Failure to breach 50,750 can drag the index down again. In that case, Bank Nifty index can fall back to 50,200-50,100 again.

A strong and sustained break above 50,750 can boost the bullish momentum. Such a break can take the index up to 51,000 and 51,200 in the coming sessions.

Bank Nifty Futures

Bank Nifty August Futures contract has recovered all the loss from its intraday low and is trading higher now. The contract touched a low of 50,341 and has risen back very well from there. It is currently trading at 50,751, up 0.35 per cent.

Immediate resistance is at 50,820. A break above it can take the contract up to 51,100 during the day. Failure to breach 50,820 and a reversal thereafter can drag the Bank Nifty August Futures contract down to 50,400-50,300 again.

As such the price action around 50,820 will need a close watch during the day.

Trade Strategy

Traders can wait and watch what is happening to the resistance at 50,820. Go short only if the contract turns down from around 50,820 and falls below 50,800. Keep the stop-loss at 50,880. Trail the stop-loss down to 50,770 as soon as the contract falls to 50,720. Move the stop-loss down to 50,670 when the contract touches 50,620. Exit the shorts at 50,500.

Supports: 50,500, 50,300

Resistances: 50,820, 51,100

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