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Bank Nifty, following a sell-off yesterday, began today’s session lower at 46,826, compared to yesterday’s close of 46,981. It dropped further post open and is currently hovering around 46,750, down 0.5 per cent.
Bank Nifty is one of the weakest sectoral indices after the first hour of today’s trade. Within the index, only AU Small Finance Bank and Bandhan Bank, up 0.1 per cent each, are in the green. The remaining 10 stocks are in the red, led by Federal Bank, down 3.2 per cent.
While both private and public sector banks are largely down today, Nifty PSU bank is down 0.1 per cent and Nifty Private bank has lost 0.4 per cent. Although the momentum is with the bears, note that Bank Nifty index has its 50-day moving average support at 46,550.
Bank Nifty futures
Bank Nifty March futures began today’s session at 47,000 versus yesterday’s close of 47,081. It has moderated to 47,000 by the end of the first hour of today’s session.
The chart of Bank Nifty futures indicates further fall from the current level. The nearest support levels are at 46,600 and 46,200. On the other hand, the immediate resistance levels are at 47,200 and 47,400.
Even though the bias is negative, there is a chance for Bank Nifty futures to rise to 47,200 before declining today. Also, since it’s weekly expiry today, we could see higher volatility — that is movement on both sides, increasing the risk for intraday trading.
Trading strategy
We recommend staying out at the current juncture and to go short on Bank Nifty futures if March futures moves up to 47,160. Target and stop-loss can be at 46,600 and 47,400 respectively.
After initiating the above trade, when the contract falls to 46,800, tighten the stop-loss to 47,100.
Supports: 46,600 and 46,200
Resistance: 47,200 and 47,400
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