Bank Nifty opened today’s session at 47,351 versus yesterday’s close of 47,328. The index rallied after the open. However, in the second hour of the session, there has been considerable sell-off. The index is now hovering around 47,000, down 0.7 per cent.

Giving the banking index a bearish edge, the advance-decline ratio stands at 1:11. HDFC Bank, up 1.2 per cent, is the sole gainer. ICICI Bank, down 1.7 per cent, is the top loser.

Within the banking space, private banks are facing relatively less selling pressure than their public sector peers. Nifty Private bank is down 0.5 per cent whereas Nifty PSU bank is down 1.7 per cent.

Bank Nifty futures

Bank Nifty March futures began today’s session at 47,500 as against yesterday’s close at 47,490. The contract appreciated after opening almost flat, and marked an intraday high of 48,034.

However, it made an abrupt change in direction and witnessed considerable sell-off. From a nearly 0.8 per cent gain today, the contract is down 0.5 per cent and is trading at around 47,200.

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There is a considerable increase in volatility, which means traders need to plan their positions with wider stop-loss levels. As it stands, the hourly chart indicates further drop in price.

While 47,000 is the nearest support, if the momentum sustains, we might even see Bank Nifty futures declining to 46,200 in a day or two. The contract should surpass 48,320 in order to turn the trend bullish.

Trading strategy                          

Since volatility has shot up, our recommendation would be to stay away until the dust settles before initiating fresh positions.

Supports: 47,000 and 46,200

Resistance: 48,000 and 48,320

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