Bank Nifty began today’s session with a gap-up at 48,114 versus yesterday’s close of 48,048. But the bears did not wait for long to act. Consequently, the index fell and is now hovering around 47,730, losing 0.6 per cent so far today.

Substantiating the bearish bias, the advances/ declines ratio of Bank Nifty stands at 1/11. State Bank of India, up 0.15 per cent, is the only gainer. Federal Bank and ICICI Bank, down 1 per cent each, are the top losers.

Within the banking space, the public sector banks seem to be facing higher downward pressure. While the Nifty PSU Bank index is down 0.6 per cent, the Nifty Private Bank index has lost nearly 0.4 per cent.

That said, Bank Nifty is now testing the 50-day moving average, which can arrest the decline. Below this is the trendline support at 47,500. Similarly, Bank Nifty futures, too, is testing support.

Bank Nifty futures

Bank Nifty futures (May contract) opened today’s session slightly higher at 48,190, as against yesterday’s close of 48,153. But it began to depreciate soon after the opening. It is now quoted at around 47,900.

The contract has support at 47,800. On its first test, this level has helped Bank Nifty futures rebound. However, for the bulls to get the momentum back, they should push the contract above the 48,000-mark.

If such an upmove occurs, Bank Nifty futures could rally to 48,200, a resistance. Subsequent resistance is at 48,400. A breakout of 48,400 can intensify the rally.

Alternatively, if the contract slips below support at 47,800, the downswing could extend further to 47,500 or to 47,300, which are the notable support levels.

Trading strategy

The price action has been bearish so far today. However, there is support ahead for Bank Nifty futures.

So, traders can stay out for now and short Bank Nifty futures if it slips below 47,800. The intraday target and stop-loss can be 47,300 and 48,050 respectively.

Supports: 47,500 and 47,300

Resistance: 48,000 and 48,200