Bank Nifty futures (44,660)

Bank Nifty opened today’s session with a gap-up – it began at 43,822.70 versus Friday’s close of 43,723.05. However, the index made a sharp reversal and declined; it is currently trading around 43,666, down 0.15 per cent.

The fall is due largely to the sell-off in public sector banks. Consequently, the Nifty PSU Bank index is down 0.9 per cent, whereas the Nifty Private Bank index has lost 0.2 per cent.

Bank Nifty futures

Like the underlying Bank Nifty, the October futures of the index opened today’s session higher at 43,790 versus last week’s close of 43,738.75. But the contract started falling soon after the open and is now hovering around 43,660.

The price action indicates good downward pressure and so we expect a further decline in Bank Nifty futures. From the current level, it is likely to drop to 43,200, a support. Subsequent support is at 43,000.

Bank Nifty futures should surpass 44,000 in order to turn the intraday trend bullish. In such a case, it can rally to 44,250 and then possibly to 44,750.

Nevertheless, as it stands, the probability of a decline looks high.

Trading strategy

Initiate fresh short positions at the current level of 43,660. Add shorts in case the price inches up to 43,850. Place stop-loss at 44,100.

When the contract falls to 43,200, tighten the stop-loss to 43,500. Book profits at 43,000.

Supports: 43,200 and 43,000

Resistance: 44,250 and 44,750