Bank Nifty index opened today’s session with a gap-up at 43,952 versus last week’s close of 43,851. It is currently hovering around 43,950, up 0.2 per cent.
The advance/decline ratio of Bank Nifty, at 7/5, shows a bullish bias. Axis Bank, up by 0.8 per cent, is the top gainer whereas AU Small Finance Bank, down by 0.6 per cent, is the top loser.
Within the banking sector, the private banks so far have outperformed their public sector peers – Nifty Private Bank index is up nearly 0.3 per cent whereas Nifty PSU Bank is down 0.2 per cent.
Bank Nifty futures
The August expiry futures of Bank Nifty opened the day lower at 43,900 versus Friday’s close of 43,965 despite the underlying index opening on the front foot. However, the contract gained and is now up 0.2 per cent.
As it stands, the support band of 43,870-44,000 stays valid. Prolonged consolidation around these levels can result in the bears losing strength which can lead to a bullish trend reversal.
If there is a rally from the current level of 44,050, the contract could face a barrier at 44,360. Resistance above this level is at 44,500.
On the other hand, if the contract falls below the support at 43,870, we might see a fall to 43,500 or even to 43,000.
Trading strategy
Since the risk-reward ratio is favourable for the long positions, we recommend buying Bank Nifty futures at the current level of 44,050. Target and stop-loss can be at 44,360 and 43,850.
Supports: 43,870 and 43,500
Resistance: 44,360 and 44,500