Bank Nifty index has come down sharply. The index is trading at 48,430, down 0.95 per cent. The advances/declines ratio is at 1:11. This very bearish. It indicates that the index can continue to trade under pressure.
Bank Nifty index outlook
An immediate support is at 48,400. A break below it can increase the downside pressure. Such a break can drag the Bank Nifty index down to 48,000 in the coming sessions.
Strong resistance is around 49,000. The index has to breach this hurdle to ease the downside pressure. Only in that case, the sentiment will turn positive for a rise back towards 50,000 again.
Bank Nifty Futures
The outlook is bearish. The Bank Nifty May Futures contract is currently trading at 48,545, down 1 per cent. Resistances are around 48,650 and then at 48,900. The Bank Nifty May Futures contract can fall to 48,250-48,200.
The contract has to rise past 48,900 to become bullish again. Only in that case, the contract can rise to 49,200 and higher again.
Trade Strategy
Traders can go short now at 48,545. Add more shorts at 48,640. Keep the stop-loss at 48,720. Trail the stop-loss down to 48,510 as soon as the contract falls to 48,470. Move the stop-loss further lower to 48,410 when the contract touches 48,360 on the downside. Exit the short positions at 48,300.
Supports: 48,250, 48,200
Resistances: 48,650, 48,900