Bank Nifty opened today’s session with a gap-up at 49,317 against yesterday’s closing level of 49,292. The index is now hovering around 49,460, up 0.3 per cent.
Substantiating the positive bias, the advance/decline ratio currently stands at 10/2. Bandhan Bank, up 2.7 per cent, is the top gainer whereas Kotak Mahindra Bank, down 0.3 per cent, is the top loser.
The public sector banks are doing well so far today and seem to have bettered their private peers. So, Nifty PSU Bank is up 0.7 per cent whereas Nifty Private Bank is up 0.4 per cent.
Broadly, the trend looks bullish for Bank Nifty and the probability of a rally is high.
Bank Nifty futures
Bank Nifty futures (June contract) opened today’s session lower at 49,130 against yesterday’s close of 49,436. But it recovered and is now trading around 49,700, up 0.5 per cent.
The price action is bullish, and we expect Bank Nifty futures to touch 50,000 today. A breakout of this can lift the contract to 51,000.
On the other hand, if the contract takes a U-turn, which is less likely, it can find support at 49,500 and 49,200.
Trading strategy
Go long on Bank Nifty futures now at 49,700 and on a decline to 49,300. Keep stop-loss at 48,900. When the contract rises past 50,000 modify the stop-loss to 49,500. Tighten the stop-loss further to 50,000 when the contract hits 50,500. Exit at 51,000.
Supports: 49,500 and 49,200
Resistances: 50,000 and 51,000