Bank Nifty, which posted a gain of 1.5 per cent last week, began today’s session with a gap-up at 49,175 versus Friday’s close of 48,924. The index is now trading at today’s open price and gained 0.5 per cent so far today.

Kotak Mahindra Bank, up 5.4 per cent, has advanced the most whereas Punjab National Bank, by losing 5.2 per cent, is the top loser in the index.

Public sector banks seem to be facing significant selling pressure in today’s early trade. Consequently, Nifty PSU Bank has lost 4.2 per cent and this is the weakest sectoral index today.

On the other hand, powered by a sharp rally in Kotak Mahindra Bank, Nifty Private Bank is up nearly 1 per cent.

Overall, Bank Nifty is in the green post the initial hour of trade. However, the price action shows that there are barriers ahead and bulls cannot have it easy against the bears.

Bank Nifty futures

Bank Nifty futures (May contract) opened today’s session higher at 49,240 against last week’s close of 49,095. It is now trading around 49,300, up 0.4 per cent.

The contract could see the upswing extend from here. However, it is likely to be capped at 49,500, a resistance. We expect Bank Nifty futures to turn around from the current level or after inching up to 49,500.

The nearest support for the contract can be spotted at 49,000. A break below this level can trigger a fall to 48,600—its 20-day moving average support. Subsequent support is at 48,000.

Trading strategy

Sell Bank Nifty futures now at 49,300. Add more short positions if the price rises to 49,500. Initial stop-loss can be at 49,800. Book profits at 48,600.

Supports: 49,000 and 48,600

Resistances: 49,500 and 49,800