Struggling Recovery: Nifty Futures and Nifty Bank Futures Face Obstacles in Reversal Attempts
The Indian equity market has been showing signs of volatility in recent weeks, with key indices like the Nifty 50 and Nifty Bank futures experiencing fluctuations. Here's a breakdown of the current market situation and suggested trading strategies for both Nifty 50 and Nifty Bank futures.
Nifty 50 Futures
Last week, Nifty 50 futures gained 1.1%, reaching 24,848. If the index continues to rise, traders can consider going short at 25,200 with a target of 24,600 and a stop-loss at 25,500. However, a move past 25,300 can lift Nifty 50 futures to 26,000. On the other hand, if Nifty 50 futures falls and slips below the nearest support at 24,550, it may open the door for a decline to 24,000.
From a trading perspective, new positions at the current level do not provide a good risk-reward ratio. In the event of a fall, Nifty Bank futures may drop to 53,800 and 53,000, notable short-term support points.
Nifty Bank Futures
Nifty Bank futures currently stand at 54,115, having gained 0.9% last week. The open interest for Nifty Bank futures (September) has increased from 28.1 lakh contracts to nearly 28.6 lakh contracts, indicating growing interest in the market.
The Put Call Ratio (PCR) of the weekly options for Nifty Bank is currently at 0.90, suggesting a slightly bearish sentiment among traders. However, a breakout of 55,000 can lift Nifty Bank futures to 56,500, with resistance above 56,500 at 58,000.
When the contract drops to 53,600, traders should trail the stop-loss to 54,300. Conversely, if the stop-loss of the short position at 25,500 is triggered, it could indicate that bulls are taking control. In such a case, going long with a stop-loss at 25,250 for a target of 26,000 may be considered.
It's important to note that the strategy to short Nifty Bank Futures was not explicitly attributed to any individual in the available sources. However, analysts like Nilesh Jain from Centrum Broking and Rupak De from LKP Securities provided technical insights and suggested buying strategies rather than short positions during the last weekend.
Conclusion
In conclusion, the market for Nifty 50 and Nifty Bank futures is showing signs of volatility, with both indices exhibiting potential for gains and losses. Traders should carefully consider their risk-reward ratios before entering new positions and monitor the market closely for any significant shifts in sentiment.
