The Bank Nifty index, after gaining for five consecutive sessions in a row, appears to have lost some upward momentum on Wednesday. It opened with a gap-down at 45,170 versus yesterday’s close of 45,301, and is now trading around 45,250.

The advances/ declines ratio of the index at 7/5 is showing positive signs. PNB is the top gainer, up by 2.6 per cent, whereas Bandhan Bank is the weakest in the index today, down by 4.2 per cent.

Public sector banks are doing well today compared to private banks – the Nifty PSU Bank index is up by 1 per cent, while the Nifty Private Bank index is down by a marginal 0.1 per cent.

Also read: Nifty Prediction today – July 5, 2023: Stuck in a range. Stay out of the market

Bank Nifty futures

The July expiry futures of the Bank Nifty opened the day lower at 45,300 versus yesterday’s close of 45,365. The contract is now hovering around 45,300.

After rallying sharply in the past few sessions, the contract now seems to have taken a sideways route, trading within 45,170 and 45,600.

While the overall trend is bullish, given the prevailing price action, there is a good chance the Nifty Bank futures will see a correction, which can be either sideways or downwards.

Therefore, for us to forecast the next leg of trend, the contract should come out of the 45,170-45,600 range.

A breakout of 45,600 can lift the Nifty Bank futures to 46,000 initially. The potential nearest resistance above this level is at 46,200. 

In case the contract falls below 45,170, we might see a corrective decline to 44,700, a support. Subsequent support is at 44,200.

Trading strategy

The Nifty Bank index and consequently its futures contract are likely to see a consolidation phase. Therefore, we recommend staying out of the market until a definitive signal of the beginning of the next leg of trend is received.

Supports: 45,170 and 44,700

Resistance: 45,600 and 46,000

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