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Bank Nifty has begun today’s session with a gap-up at 44,656, versus Monday’s close of 44,494. It has then moderated to the current level of 44,540. The price action shows positive inclination, and the likelihood of a rally is high.
Supporting the positive bias, the advance/decline ratio of the index is at 8/4. Federal Bank, up by 1.3 per cent, is the top gainer whereas Axis Bank, down by 0.7 per cent, is the top loser so far today.
The private banks are performing better than their public sector peers. Nifty Private Bank index is up 0.15 per cent whereas Nifty PSU Bank index has lost 0.6 per cent.
Bank Nifty futures
The August contract opened today’s session higher at 44,607 versus yesterday’s close of 44,486. After marking a high of 44,688, the contract is now trading at 44,500.
As the contract is trading above 44,360, the bias is bullish, and the probability of a rally is high. Bank Nifty futures is likely to touch 45,000 soon. Notably, the price band of 44,900-45,000 is a resistance band.
On the other hand, if the price slips below 44,360, the trend could turn bearish and the contract might drop to 44,000. However, this is less likely to happen.
Trading strategy
Buy Bank Nifty futures now at around 44,500. Add more longs when the price dips to 44,360. Place stop-loss at 44,150. When the contract touches 44,750, tighten the stop-loss to 44,500. Book profits at 44,900.
Supports: 44,360 and 44,200
Resistance: 44,900 and 45,000
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