Short Squeeze pushes Bank Nifty to 51,200, but profit booking pulls it back near support zone

The underlying trend for today remains bullish

A short squeeze-backed rally pushed the Bank Nifty index up by 700 points on June 19, crossing the psychological mark of 51,000. This marks a resurgence in the banking sector after it underperformed compared to Nifty last week. At 10:14 am on June 19, Bank Nifty was trading up 650 points at 51,045. The short squeeze above the 50,600 strike fueled the rally to 51,000. However, profit booking erased early gains, and by 10:30 am, Bank Nifty futures fell steeply back to the 50,600 support zone.

The top five Nifty gainers were all from the private banking space: IndusInd, ICICI, Kotak, HDFC, and Axis.

"Bank Nifty has hit a new all-time high and stability over 51,200 could steer more upside for today. On the downside, support of 50,600 remains a neckline for upward bias. The underlying trend for today remains bullish," said Avdhut Bagkar, Derivative and Technical Analyst at Stoxbox.

Expiry day strategy recommended by Bagkar:

Hero-Zero Strategy:

Long Bank Nifty 19 June 51,000 CE at around Rs 65
Stop Loss: Rs 0
Target: Rs 150 and Rs 200

According to Akshay Bhagwat, Senior Vice President of Derivative Research at JM Financial, "Bank Nifty is neared its all-time high where it faced intra-resistance at 51,200. Options are sold to play within the range of 50,500-51,200. Any breakout risk above 51,200 will be hedged by buying 51,500 CE."

Expiry strategy recommended by Bhagwat:

Bank Nifty Expiry Day Strategy for June 19
SELL 50,500 PE at Rs 60-65
SELL 51,400 CE at Rs 40-50
BUY 51,500 CE at Rs 25-30
Target: 70-75 points
Stop Loss: Below 50,300 (Spot)

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