Wednesday, 7 June 2017

Bank Nifty on track to hit 24K; Here's how to trade ahead of outcome of RBI's MPC meet

As main market indices like Nifty are technically looking weak in the short term any sell off in that may have spill over effect even on this index.

The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) is expected to maintain a dovish stance later today, but that will keep rate sensitive stocks such as banks in focus ahead of the outcome.

After witnessing a strong rally on 25th of May, from the lows of 22570–23267, Bank Nifty appears to be in a consolidation phase digesting those single day gains for last 7 trading sessions.

Technically, speaking that upmove, has further strengthened the existing up trend and hence logically after this consolidation phase gets culminated, Bank Nifty can be expected to register fresh breakout which may take this index towards 24,000 levels.

However, banking bulls currently appears to be waiting for a monetary policy and hence any positive surprise shall act as a trigger for this much awaited breakout.

However, as the current trend is strong without any negative chart formations we advise traders to remain optimistic irrespective of the policy outcome as along as Bank Nifty 23090 levels on closing basis.

Till that level is violated banking bulls need not shun their long side bets but consider dips as a buying opportunity.

Strategy For policy day:

As main market indices like Nifty are technically looking weak in the short term any sell off in that may have spill over effect even on this index.

Hence, we advise banking bulls to take long side exposure through call options with a strike price of 23700 with expiry date of 8th June 2017 so that losses can be limited in case market turns it back on the face of bulls.

Disclaimer: The author is Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in. The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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