Nifty Bank opened today’s session flat at 49,469 versus yesterday’s close of 49,479. The index started to rise and is now trading at 49,760, up 0.5 per cent.
The advance/decline ratio of the index stands at 10/2, signalling a bullish bias. Kotak Mahindra Bank and IndusInd Bank, up 1.5 and 1 per cent respectively, are the top gainers. Canara Bank, down 0.3 per cent, is the top loser.
Nifty PSU Bank has gained 0.25 per cent so far today and Nifty Private Bank is up 0.9 per cent. Therefore, broadly, the private sector banks are outperforming their public sector peers.
Bank Nifty futures
Nifty Bank futures (February contract) opened today’s session at 49,735 against yesterday’s close of 49,717. It is now trading at 49,900, up 0.4 per cent.
Although there was a strong recovery in the second half of yesterday’s session and the contract has been in the green so far today, there is a barrier between 49,800 and 50,000.
A breakout of this can lead to a sustainable rally. Resistance above 50,000 is at 50,800.
In case there is a fall off the above-mentioned resistance, Nifty Bank futures can drop to 49,200. A breach of this can drag the contract to 49,000. Support below 49,000 is at 48,600.
Trading strategy
Bias is bullish but Nifty Bank futures faces resistance ahead. Therefore, we suggest staying out.
Supports: 49,200 and 49,000
Resistance: 49,800 and 50,000