Bank Nifty opened today’s session higher at 50,194 versus last week’s close of 50,002. It further appreciated in early trade and is now hovering around 50,170, up 0.3 per cent.

The index is currently testing a resistance. A break-out of this can lead to a sharp rally. On the other hand, a decline can keep the index in a sideways range, which has been in place since early last week.

The advances/ declines ratio, at 9/3, gives a positive inclination to Bank Nifty. IDFC First Bank, by advancing 1.7 per cent, is the leader in the index, whereas Federal Bank, by losing 0.4 per cent, is the laggard.

Both the Nifty PSU Bank and Nifty Private Bank indices have gained nearly 0.4 per cent each so far today.

Bank Nifty futures

Bank Nifty futures (June contract) began today’s session with a gap-up at 50,191 versus Friday’s close of 50,042. It is now trading at 50,225, up nearly 0.4 per cent.

The contract is testing the upper boundary of the 49,530-50,300 range. If it breaks above 50,300, it will most likely witness a swift rally to 51,000. A breach of this can lift the contract to 51,500.

On the other hand, if Bank Nifty futures moderates, it can slowly return to the bottom of the range. That said, a break below 49,600 today is unlikely.

So, today, we expect Bank Nifty futures will either breach 50,300 or stay flat for the rest of the day.

Trading strategy

Buy Bank Nifty futures only if it breaks out of 50,300. Place stop-loss at 49,800. When the contract rises to 51,000, alter the stop-loss to 50,500. On a rally to 51,200, tighten the stop-loss further to 50,900. Exit at 51,500.

Supports: 50,000 and 49,530

Resistance: 51,000 and 51,500

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