Nifty Bank opened today’s session with a gap-up at 49,539 versus yesterday’s close of 49,211. It inched up further and is currently hovering around 49,880, up 1.4 per cent.
The advance/decline ratio is currently at 11/1, a strong bullish indication. AU Small Finance Bank, down 1 per cent, is the only stock in the index that is down so far today.
Canara Bank and Bank of Baroda, up 2.5 per cent and 2.4 per cent respectively, are the top gainers in Bank Nifty.
Nifty PSU Bank has gained 2.2 per cent so far today and Nifty Private Bank is up 1.2 per cent. Therefore, broadly, the public sector banks are outperforming their private peers.
Bank Nifty futures
Nifty Bank futures (February contract) opened today’s session higher at 49,702 against yesterday’s close of 49,505. It is now trading at 50,060, up 1.1 per cent.
The contract is facing a resistance at 50,100. If this level is breached, Nifty Bank futures can rally to 51,000, a resistance. Subsequent resistance is at 51,500.
But if Nifty Bank futures fall off the hurdle at 50,100, it can drop to 49,700, a support. Below this, the nearest support is at 49,500 where a rising trendline coincides.
Broadly, there is a bullish bias shown by Nifty Bank futures but traders can wait for the breach of the barrier at 50,100 before acting.
Trading strategy
Buy Nifty Bank futures if it breaks out of 50,100. Target and stop-loss can be 51,000 and 49,700 respectively.
Supports: 49,700 and 49,500
Resistance: 50,100 and 51,000