Bank Nifty opened today’s session with a gap-down at 52,529 versus yesterday’s close of 52,569. It extended the decline further and is now trading around 52,280, down 0.5 per cent.
Indicating strong selling pressure, all 12 stocks in Bank Nifty are in the red, led by Bandhan Bank, down 2.5 per cent. This is followed by Punjab National Bank, losing 1.9 per cent.
Within banking, the public sector banks seem to be facing greater downward pressure compared to their private peers. Thus, Nifty PSU Bank has lost 1.6 per cent whereas Nifty Private Bank is down 0.6 per cent.
Bank Nifty futures
Bank Nifty futures (July contract) opened today’s session lower at 52,542 versus yesterday’s close of 52,616. It dropped further to 52,400, losing 0.4 per cent.
The contract is now trading near an important support of 52,300 where a trendline support coincides as well. If this support is breached, the sell-off can intensify and Bank Nifty futures could fall to 52,000 or go beyond this level and touch 51,400.
On the other hand, if the contract rebounds from here, it can retest the nearest notable resistance at 53,300. A breakout of this can lift Bank Nifty futures to 54,000 and 55,000 in the near-term.
Trading strategy
Stay away for now. Initiate fresh short if Bank Nifty futures breaches the support at 52,300. Target and stop-loss can be at 51,400 and 52,700 respectively.
Traders with risk-appetite can go long now for a target of 53,300 as the contract is now trading near the support at 52,300. But once the support is breached, exit the long and go short with target and stop-loss levels mentioned above.
Supports: 52,000 and 51,400
Resistance: 53,300 and 54,000