Bank Nifty opened today’s session slightly lower at 50,052, compared to yesterday’s close of 50,119. It is now hovering around 50,110, thereby staying flat so far today.
The breadth of the index shows a bearish inclination as the advance/decline ratio stands at 4/12. HDFC Bank, up 0.4 per cent, is the top performer whereas Punjab National Bank, down 1 per cent, is the biggest loser in Bank Nifty today.
The Nifty PSU Bank index has lost 0.5 per cent, whereas the Nifty Private Bank index is flat. Therefore, private-sector banks are outperforming their public-sector peers.
Bank Nifty futures
Bank Nifty futures (August contract) opened today’s session lower at 50,240 versus yesterday’s close of 50,341. It is now trading at around 50,200, down about 0.2 per cent.
The price action since Monday shows that the contract is trading between 49,800 and 50,800. Immediately above 50,800 is a resistance at 51,000, where Bank Nifty futures could meet a trendline resistance.
Within the broader 49,800-50,800 range, the contract has been oscillating between 49,800 and 50,400 in the last two days. Relatively, Bank Nifty futures are trading closer to the hurdle at 50,400.
So, although it is not apt to take directional bets when the security is held in a range, the likelihood of a fall is high since Bank Nifty futures is trading near a resistance. From the current level, we can expect it to retest 49,800.
But if the contract rallies past 50,400, it could rise to the 50,800-51,000 price region.
Trading strategy
Short Bank Nifty futures now at 50,200. Place stop-loss at 50,450. Book profits at 49,800.
Supports: 49,800 and 49,500
Resistance: 50,400 and 50,800