Bank Nifty began today’s session with a gap-up — it opened at 43,308.30 versus Monday’s close of 43,151.20. It is currently at 43,275, up 0.3 per cent.

The advance-decline ratio gives the index a bullish bias as it stands at 9/3. Punjab National Bank, up 1.4 per cent, is the top gainer; Bandhan Bank, down 0.6 per cent, is the top loser.

The public sector banks seem to be pushing up the index. This is evident from the relative performance of public and private banks. Nifty PSU Bank index is up 1.2 per cent whereas Nifty Private Bank is up 0.2 per cent.

Bank Nifty has been under downward pressure for some time and, with Monday’s fall, the index has confirmed a double-top pattern. This indicates a potential bearish reversal, and a fall to 41,150 in the forthcoming sessions.

Bank Nifty futures

Like the underlying Bank Nifty, the October futures of the index opened today’s session higher at 43,261 versus Monday’s close of 43,141.60. The contract is currently trading at 43,240, up 0.25 per cent.

Also read

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Although the contract has gone up so far today, the overall bias remains bearish. Bank Nifty futures can shed the negative inclination only if it rallies past 43,700.

So the probability of a fall is high. The contract might see a decline to 42,950. It could drop further to 42,750 if bears retain the momentum.

Trading strategy

Short Bank Nifty futures now at 43,240 and add shorts if it moves up to 43,500. Place stop-loss at 43,700.

When the contract touches 42,950, tighten the stop-loss to 43,100. Exit at 42,800.

Supports: 42,950 and 42,750

Resistance: 43,500 and 43,700

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