Nifty Bank opened today’s session with a gap-down at 49,812 versus yesterday’s close of 49,981. It dropped after opening and is currently hovering around 49,600, down nearly 0.8 per cent.
The advance/decline ratio is currently at 1/11, a strong bearish indication. Except Axis Bank, up by a marginal 0.1 per cent, other stocks in the index are down. Punjab National Bank and Canara Bank, down over 2 per cent each, are the top losers.
Nifty PSU Bank has lost 1.5 per cent so far today and Nifty Private Bank is down 0.8 per cent. Therefore, broadly, the public sector banks are facing higher selling pressure than their private peers.
Bank Nifty futures
Nifty Bank futures (February contract) opened today’s session lower at 50,190 against yesterday’s close of 50,234. It is now trading at 49,820, down 0.8 per cent.
The contract slipped below the support at 49,980, turning the outlook bearish. From the current level, Nifty Bank futures can move up to 49,980 and then resume the fall.
The nearest notable support from the current level is 49,200. Subsequent support is at 49,000.
On the other hand, if Nifty Bank futures surpass 49,980, it might recover to 50,400. However, given the prevailing price action, the sell trend appears strong a rally above 49,980 is less likely.
Trading strategy
Short Nifty Bank futures at the current level of 49,820 with a stop-loss at 50,100. Exit at 49,200.
Supports: 49,200 and 49,000
Resistance: 49,980 and 50,400