Bank Nifty began today’s session lower at 49,713 versus yesterday’s close of 49,835. It dropped further after opening and is currently trading at 49,300, down a little over 1 per cent.

Barring Kotak Mahindra Bank (up 0.7 per cent) and AU Small Finance Bank (0.2 per cent), all other banks in the index are down. Therefore, the advance/decline ratio currently stands at 2/10.

HDFC Bank and Axis Bank are the top losers by depreciating 1.6 per cent each.

Nifty PSU Bank is down 1.2 per cent and Nifty Private Bank has lost nearly 0.9 per cent. Therefore, broadly, the public sector banks are experiencing higher downward pressure when compared to the private banks. 

Bank Nifty futures

Bank Nifty futures (January contract) opened today’s session lower at 49,960 against yesterday’s close of 50,095. It declined after opening and is currently hovering around 49,560, down 1 per cent.

The contract has again dropped below the key 50,000-mark and it has also formed a lower low, increasing the chances for more decline.

From the current level, the nearest support is at 49,000. A breach of this can drag the contract to 48,500.

On the other hand, if Bank Nifty futures rally from the current level, it can rise to 50,000, which will be a resistance. A breakout of this can lead to a rally to 50,500.

Overall, Bank Nifty futures appear bearish and the chances for a fall are high.

Trading strategy

Short Bank Nifty futures now at 49,560 and on a rise to 49,800. Place a stop-loss at 50,300. When the contract slips to 49,400, revise the stop-loss to 49,800. Book profits at 49,000.

Supports: 49,000 and 48,500

Resistance: 50,000 and 50,500