Bank Nifty opened today’s session at 54,111 versus yesterday’s close of 54,106. The index is now hovering around 54,070.
At the moment, 11 out of 12 stocks in the index are in the red, giving a strong bearish tilt. HDFC Bank, up 0.9 per cent, is the sole gainer at the end of the first hour of trade.
Punjab National Bank and Bandhan Bank, down 2.5 per cent and 1.4 per cent, respectively, are the top losers.
Broadly, the public sector banks are facing higher downward pressure so far today when compared to private peers. Consequently, Nifty PSU Bank is down 0.5 per cent whereas Nifty Private Bank is down 0.1 per cent.
Bank Nifty futures
Bank Nifty futures (October contract) opened today’s session slightly higher at 54,394 versus yesterday’s close of 54,331. It is now trading at 54,400, up 0.1 per cent.
The chart denotes good upward momentum, so there is a high probability of the rally extending. Bank Nifty futures can rise to 55,200 in the short term.
That said, from the current level of 54,400, the contract may retrace to 54,000 before the next leg of rally. The price region between 53,800 and 54,000 is a considerable support. A breach of this can turn the near-term outlook negative.
But as it stands, Bank Nifty futures can either rally from the current level of 54,400 or after a corrective decline to 54,000.
Trading strategy
Go long if Bank Nifty futures surpass 54,500. Target and stop-loss can be 55,200 and 54,200, respectively.
Alternatively, if Bank Nifty futures decline from the current level of 54,400, go long at 54,000 with a stop-loss at 53,700. When the contract touches 54,500, revise the stop-loss to 54,200. Exit at 55,200.
Note that the above recommendations are not strictly intraday. So if neither the target nor the stop-loss mentioned above are triggered today, traders can consider carrying them over to the next few sessions.
Supports: 54,000 and 53,800
Resistance: 55,200 and 55,500