Bank Nifty index opened today’s session with a gap-up at 45,546 versus Friday’s close of 45,468. It is currently trading at around 45,525, up 0.1 per cent for the day after the first hour of trade.

The advance/decline ratio of the index, which stands at 8/4 gives it a bullish bias. Within the banking sectors, the public sector banks are outperforming their private peers. Consequently, Nifty PSU Bank index is up 0.3 per cent whereas Nifty Private Bank index is trading flat.

Bandhan Bank is the top gainer by advancing 2.9 per cent and Kotak Mahindra Bank, down 0.7 per cent, is the weakest in the index so far today.

While the market breadth gives the index a bullish bias, the chart shows that Bank Nifty has room to extend the corrective decline before resuming the rally.

Bank Nifty futures

The August expiry futures of Bank Nifty opened the day higher at 45,745 versus Friday’s close of 45,699. It is currently trading around 45,735.

The price action shows that the contract faces resistance at 45,750 and 45,900. Notably, 45,900 is the neckline of the double top pattern which the contract confirmed on Friday.

According to the pattern, Bank Nifty futures could decline to 45,350, a support. Subsequent support is at 45,000.

On the other hand, if there is a recovery from the current level of 45,735, it may not extend beyond 45,900.

Trading strategy

Sell Bank Nifty futures now at 45,735 and add shorts if the price moves up to 45,850 Keep stop-loss at 46,120 at first.

When the contract slips below 45,525, tighten the stop-loss to 45,700. Book profits at 45,350.

Supports: 45,350 and 45,000

Resistance: 45,750 and 45,900

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