Bank Nifty began today’s session on the backfoot as it opened lower at 47,843 versus yesterday’s close of 47,977. But the index recovered and is now hovering around yesterday’s closing level.

The advance/decline ratio stands at 9/3 and this gives a positive bias. State Bank of India, up nearly 1 per cent, is the top gainer whereas Axis Bank, down 0.6 per cent, is the top loser.

The public sector banks seem to be the driver of Bank Nifty as broadly, they have been outperforming their private peers so far today. Consequently, Nifty PSU Bank is up 0.6 per cent whereas Nifty Private Bank is down nearly 0.2 per cent.

For Bank Nifty, the recovery in the second half of yesterday’s session is a big plus. But it is now testing a resistance. If this is breached, we are in for another leg of sharp rally.

Bank Nifty futures

Bank Nifty futures (May contract) began today’s session at 48,140 as against yesterday’s close of 48,092. It is now hovering around 48,100.

The contract is facing a considerable barrier at 48,200. With the help of the current momentum, if it can surpass this hurdle, we are likely to witness another leg of rally.

Nearest notable resistance above 48,200 can be spotted at 48,500 and 49,000. On the other hand, there are support at 47,950 and 47,750. A break below 47,750 will negate the bullish inclination.

Trading strategy

Stay on the fence for now. Initiate fresh longs when Bank Nifty futures break out of 48,200. Place initial stop-loss at 47,900. When the contract goes above 48,500, tighten the stop-loss to 48,200. Book profits at 49,000.

Supports: 47,950 and 47,750

Resistance: 48,500 and 48,900

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