Bank Nifty began today’s session lower at 50,667 versus yesterday’s close of 50,803. The index slipped further and is currently at 50,530, down 0.5 per cent.
The advance-decline ratio of the index stands at 1:11, which is bearish. Bandhan Bank, up 2.6 per cent, is the only gainer. Federal Bank and ICICI Bank, down 1.2 and 0.8 per cent, respectively, are the top losers so far today.
Nifty PSU Bank and Nifty Private Bank are down about 0.4 per cent each so far. Broadly, the banking stocks seem to be facing downward pressure.
Bank Nifty futures
Bank Nifty futures (August contract) opened today’s session at 50,832 versus yesterday’s close of 50,892. It is now trading at 50,700, down nearly 0.4 per cent.
The contract, after trading briefly above 51,000 yesterday, slipped back below that resistance in the second half of the session. Nevertheless, the chart shows that the positive bias exists and a rally cannot be ruled out.
The price action indicates a likely upswing to 53,400 in the short run. But if Bank Nifty futures declines from and slip below the support at 50,450, the bears can gain traction, leading to further decline.
Support below 50,450 can be spotted at 50,000.
Trading strategy
Traders can buy now at 50,700 and accumulate at 50,600. Place stop-loss at 50,450.
When the contract crosses 51,000, revise the stop-loss to 50,700. Tighten the stop-loss further to 51,200 when the price hits 51,500. Book profits at 51,800.
A rally to 52,000 might take a few sessions. So, traders can hold on to the long trades but stick to the recommended stop-loss strictly.
Supports: 50,450 and 50,000
Resistance: 51,000 and 52,000