Nifty Bank opened today’s session with a gap-down at 48,437 versus yesterday’s close of 48,744. It is now hovering around 48,400, down 0.7 per cent.
The advance/decline ratio stands at 3/9, giving the index a bearish bias. AU Small Finance Bank, up 1.1 per cent, is the top gainer whereas IndusInd Bank, down 4.7 per cent, is the top loser.
Nifty Private Bank is down 0.7 per cent whereas Nifty PSU Bank is down by 1.5 per cent. So, comparatively, the public sector banks are contributing more in Nifty Bank’s decline.
Nifty Bank futures
Nifty Bank futures (March contract) opened today’s session lower at 48,734 against yesterday’s close of 48,035. It is now trading at 48,725, down 0.6 per cent, after marking a low of 48,430.
The contract rebounded on the back of the support at 48,600. However, for Nifty Bank futures to turnaround the trend, it should surpass the hurdle at 49,000. Resistance above 49,000 is at 49,500.
In case the contract drops below 48,600 again, it can lead to another leg of downtrend, possibly to 48,200 and 48,000.
Broadly, despite the bias being bearish, Nifty Bank futures has a support ahead. On the other hand, this does not mean a rally from here as there is a barrier ahead too. So, at this juncture, there is no clarity in the direction of the next price swing.
Trading strategy
Since the price action shows uncertainty with respect to the next leg of trend, we suggest staying out.
Supports: 48,600 and 48,200
Resistance: 49,000 and 49,500