Bank Nifty began today’s session flat at 50,625 versus previous session’s close of 50,626. The index is currently hovering around 50,030, down 1.1 per cent at the end of the first hour of trade.
10 out of 12 stocks in the index are in the red, a bearish signal. Kotak Mahindra Bank and Axis Bank, up 0.1 per cent each, are the two gainers. Bank of Baroda and Punjab National Bank, down 5.5 and 5.1 per cent, are the top gainers.
Nifty PSU Bank has lost a considerable 4.3 per cent whereas Nifty Private Bank is down nearly 0.5 per cent. So, broadly, the public sector banks are facing substantial selling pressure.
Bank Nifty futures
Bank Nifty futures (November contract) opened today’s session lower at 50,500 versus previous close of 50,591. It is now trading at 50,120, down 0.9 per cent.
While there is a chance for the contract to see a minor rally, possibly to 50,325, we expect it to resume the downtrend again and drop to 49,500.
On the other hand, if the contract rallies past 50,325, it will face a resistance at 50,500. A breakout of 50,500 can turn the trend bullish where Bank Nifty futures can rise to 51,000.
Trading strategy
Short Bank Nifty futures at 50,120 and on a rally to 50,325. Place stop-loss at 50,600. Book profits at 49,500.
Supports: 50,000 and 49,500
Resistance: 50,500 and 51,000