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Bank Nifty began today’s session lower at 45,493.70 versus Monday’s close of 45,979.85. The index is now at 45,530, down 1 per cent. Interestingly though, the advance/decline ratio stands at 7/5.
AU Small Finance Bank, up 2.3 per cent, is the top gainer whereas HDFC Bank, down 3.7 per cent, is the top loser. Broadly, the weakness in private banks is acting as a drag on the index.
Nifty PSU Bank index has depreciated 0.1 per cent. On the other hand, Nifty Private Bank index has lost 0.8 per cent.
Bank Nifty futures
Like the underlying Bank Nifty, the September futures of the index began lower at 45,705 versus previous close of 46,072. The contract is currently trading at 45,660.
The 14-day Average True Range (ATR) of the contract shows that the average movement in Bank Nifty futures of late has been around 430 points. The contract is already down by a little over 400 points. Thus, the scope for further fall is low even though the nearest support can be spotted at 45,500.
So, there might be a corrective rally and then the contract could see a fall. The upside is likely to be limited to 45,800 – a resistance.
Trading strategy
Stay on the fence and short Bank Nifty futures if the price inches up to 45,800. Target and stop-loss can be at 45,500 and 45,950 respectively.
Supports: 45,500 and 45,400
Resistance: 45,800 and 45,900
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