Nifty Bank opened today’s session marginally higher at 48,691 versus yesterday’s close of 48,652. It is now hovering around 48,650.
The advance/decline ratio of the index is not at 4/8, giving the index a bearish bias. IndusInd Bank, up 0.7 per cent, is the top gainer whereas Punjab National Bank, down 1.2 per cent, is the top loser.
Nifty PSU Bank has lost 0.7 per cent at the end of the first hour of today’s trade whereas Nifty Private Bank is flat. Therefore, broadly, the public sector banks seem to be facing higher downward pressure compared to their private peers.
Bank Nifty futures
Nifty Bank futures (February contract) opened today’s session at 48,807 against yesterday’s close of 48,794. It is now trading at 48,700, down 0.2 per cent.
On Monday, the contract rebounded after finding support between 48,500 and 48,350. For the recovery to turn into a bull trend, Nifty Bank futures should surpass the nearest notable barrier at 49,000.
A breakout of 49,000 can lead to a rally to 49,500.
On the other hand, if Nifty Bank futures declines from the current level of 48,700, it is likely to retest 48,350. A breach of this can quickly drag the contract to 48,000.
Broadly, the bias being bearish, the likelihood for a fall appears high.
Trading strategy
Short Nifty Bank futures now at 48,700 and 48,900. Place stop-loss at 49,200. Exit at 48,350.
Supports: 48,500 and 48,350
Resistance: 49,000 and 49,500