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Bank Nifty began Wednesday’s session slightly lower at 44,494.65 versus Tuesday’s close of 44,532.15. However, it has recovered to 44,540. The index is trading above key levels and the inclination is bullish.
That said, the advances/ declines ratio is flat at 6/6. HDFC Bank, up 0.7 per cent, is the top gainer, and IndusInd Bank, down 0.6 per cent, is the top loser.
Both the Nifty PSU Bank and Nifty Private Bank index are flat so far today.
Bank Nifty futures
Unlike the underlying Bank Nifty, the September futures of the index began lower at 44,710 versus yesterday’s close of 44,766. It has now inched up to 44,700.
The support at 44,640 has been holding well and as long as it stays true, the likelihood of a rally will be high. Although 44,800-44,850 can be a resistance band, we expect the contract to rise past this level and reach 45,000. A breach of this level can lift the contract to 45,200.
On the other hand, if Bank Nifty futures falls below the support at 44,640, we might see a decline to 44,500. A drop below 44,500 is less likely today.
Trading strategy
Traders can buy Bank Nifty futures at the current level of 44,700. Add longs in case the price dips to 44,570. Place the initial stop-loss at 44,480.
When the contract rises past 44,800, tighten the stop-loss to 44,640. Book profits at 45,000.
Supports: 44,640 and 44,500
Resistance: 44,800 and 45,000
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