Bank Nifty began today’s session at 52,259 versus yesterday’s close of 52,317. The banking index is now at 51,850, down 0.9 per cent.
The advance/decline ratio stands at 3/9, a bearish indication. IDFC First Bank, up 0.7 per cent, is the top gainer whereas ICICI Bank, down 1.5 per cent, is the top loser.
Nifty PSU Bank is down nearly 0.2 per cent so far today. But Nifty Private Bank has lost 1 per cent. So, the private sector banks are facing bigger selling pressure compared to the public sector peers.
Bank Nifty futures
Bank Nifty futures (November contract) opened today’s session at 52,545 versus yesterday’s close of 52,650. It is now hovering around 52,130, down 1 per cent.
While the bears have been dragging Bank Nifty futures since the beginning of the session, it has now fallen near a support at 52,000. This has the potential to arrest the decline.
That said, if the contract recovers on the back of this level, it can face resistance at 52,500 and 52,800.
But if Bank Nifty futures slip below the support at 52,000, it can fall to 51,600. The downtrend can extend to 51,300.
Trading strategy
Go short if Bank Nifty futures fall below the support at 52,000. Keep a stop-loss at 52,300. When the contract declines to 51,600, revise the stop-loss to 52,000. Book profits at 51,300.
Supports: 52,000 and 51,600
Resistance: 52,500 and 52,800