Bank Nifty index has declined sharply today and is currently trading at 48,646, down about 1.1 per cent.  The advance-decline ratio is at 4:8. This is negative.

Bank Nifty index outlook

The index has declined below a key support level of 48,800. So long as the index stays below 48,800 the outlook will be negative. The Bank Nifty index can fall to 48,500 from there. A break below 48,500 can drag the index further down to 48,200.

A strong break above 48,800 and a subsequent rise past 48,850 is needed to turn the sentiment positive. If that happens, then the index can rise to 49,000 and higher.

Bank Nifty futures

The Bank Nifty May futures (48,630) is down 1.12 per cent. Intraday resistance is around 48,750. The contract can fall to 48,480 during the day. A break below 48,480 will drag the contract down to 48,250.

The contract must rise above 48,750 to see a rise to 49,000 again.

Trade strategy

Traders can go short now at 48,630. Add more shorts on a rise at 48,730. Keep a stop-loss at 48,780. Trail the stop-loss down to 48,590 as soon as the contract falls to 48,575. Move the stop-loss further down to 48,560 when the contract touches 48,540. Exit the shorts at 48,520.

Supports: 48,480, 48,250

Resistances: 48,750, 49,000