Bank Nifty began the final trading session of this year with a gap-down at 50,648 versus yesterday’s close of 50,953. After touching an intraday high of 50,911, the index was at 50,700 by the end of the first hour of trade.

The advance/decline ratio of Bank Nifty stood at 2/10. AU Small Finance Bank, down nearly 4 per cent, and The Federal Bank, down 2.1 per cent, are the top losers. Kotak Mahindra Bank and SBI, up 1.1 and 0.4 per cent respectively, are the only gainers.

Nifty PSU Bank is flat so far today whereas Nifty Private Bank has lost 0.4 per cent. So, broadly, the public sector banks are outperforming their private peers.

Bank Nifty futures

Bank Nifty futures (January contract), like the underlying, began today’s session lower at 51,085 against yesterday’s close of 51,404. It is now hovering around 51,000, down 0.7 per cent.

The contract has slipped below a support at 51,200. So, the chances are for further decline. The nearest support from the current level can be seen at 50,400. Subsequent one is at 50,000.

On the other hand, if the contract reverses and breaks out of 51,200, it may extend the rally to 51,700, a resistance. Above this, 52,300 is the nearest resistance.

Trading strategy

Short Bank Nifty futures now at 51,000 and add more shorts if the price rises to 51,250. Place stop-loss at 51,700. When the contract drops to 50,600, revise the stop-loss to 50,800. Book profits at 50,400.

Supports: 50,400 and 50,000

Resistance: 51,200 and 51,700