Bank Nifty opened today’s session marginally lower at 45,295.65 versus yesterday’s close of 45,367.75. The index witnessed a recovery and is now hovering around 45,830, up 1 per cent.
The breadth of the index indicates strong bullishness as 11 out of 12 stocks have advanced so far today.
HDFC Bank, up 1.5 per cent, is the leader, followed by ICICI Bank, up 1.4 per cent. Bank of Baroda, down 1.2 per cent, is the only stock in the index that has declined today.
The rally in Bank Nifty is powered by private banks. Notably, Nifty Private Bank has gained 1.2 per cent whereas Nifty PSU Bank is flat.
Bank Nifty futures
Bank Nifty futures (February expiry) began today’s session lower at 45,579 as against yesterday’s close of 45,671. It is now trading around 46,130, up 1 per cent.
Since the contract has surpassed 46,000, the probability of a rally is high. The nearest resistance is at 46,700 and the subsequent one at 47,000.
In case Bank Nifty futures fall from the current level and slip below 46,000 it could dip to 45,800. A drop below this level today is less likely.
Trading strategy
Buy Bank Nifty futures at the current level of 46,130. Accumulate if the price dips to 45,900. Place stop-loss at 45,700.
When the contract gets past 46,500, tighten the stop-loss to 46,250. Book profits at 46,700.
Supports: 46,000 and 45,800
Resistance: 46,700 and 47,000