How to trade Bank Nifty, Fin Nifty ahead of RBI Policy? Key levels to track

On Thursday thus far, Nifty Bank, Nifty PSU Bank and Nifty Financial Services quoted with losses up to 0.8% in a slippery market; technical charts hint up to 8% potential upside on these indices.

The 3-day Reserve Bank of India (RBI) appointed Monetary Policy Committee's (MPC) final meeting for the financial year 2024-25 is underway, with the new RBI governor Sanjay Malhotra scheduled to announce the Policy decision tomorrow, Friday, February 07, 2025.  This is Sanjay Malhotra first monetary policy committee (MPC) meeting, after he took charge in mid-December from his predecessor Shaktikanta Das. Most economists expect the RBI cut to cut interest rates by 25 basis points - a first in nearly 5 years.  Sanjay Malhotra has added reason to cut interest rates after recent data showed the economy slowed more than expected and the US President Donald Trump sends shockwaves through global markets with new tariffs, believe economists.  RBI Policy action tends to have direct implications on the stock market, especially interest-rate sensitive sectors - such as banks, non-banking financial institutions others such as auto and real-estate.    On Thursday, thus far, equity markets were seen trading with losses. The Bank Nifty and Fin Nifty were down 03 per cent each, while the Nifty PSU Bank index slipped 0.8 per cent. In comparison, the NSE benchmark Nifty 50 index was down 0.5 per cent at 23,590 levels.  As such, here's a trading guide with key levels to track on the key banking (Bank Nifty and PSU Bank) and the Nifty Financial Services (Fin Nifty) indices.  Bank Nifty  Current Level: 50,225  Upside Potential: 8%  Support: 50,150; 49,600; 49,150  Resistance: 50,400; 50,885; 51,075; 51,300  The Bank Nifty has gained 5.5 per cent from its January low of 47,844, and now seen testing resistance around the super trend line on the daily scale at 50,400. On the long-term chart, Bank Nifty seems to have found support around its 20-MMA (Monthly Moving Average) at 48,500 - a key indicator the stock has held since July 2022.  For now, the Bank Nifty needs to break and trade consistently above 50,400 for further gains to emerge. The index can potentially rally to 51,300; break above which shall open the doors for a rally towards 54,250 levels. Key hurdles on the way are placed at 50,885 and 51,075 levels. CLICK HERE FOR THE CHART  On the flip side, sustained trade below 50,150, can drag the index down to 48,800 levels; with interim support expected around 49,600 and 49,150 levels.    Fin Nifty (Nifty Financial Services)  Current Price: 23,588  Upside Potential: 6.2%  Support: 23,265; 22,900; 22,700  Resistance: 23,770; 24,000; 24,700  The Fin Nifty index has surged over 6 per cent from its recent low, and is now seen testing resistance around its 100-DMA (Daily Moving Average) at 23,770. The index needs to clear this hurdle for a likely up move towards 25,050 levels; with interim resistance seen at 24,000 and 24,700 levels.  On the flip side, failure to conquer the 100-DMA, could see the index slip back to 23,265, 22,900 and 22,700 levels. CLICK HERE FOR THE CHART  Nifty PSU Bank  Current Price: 6,284  Upside Potential: 5%  Support: 6,225; 6,150  Resistance: 6,440; 6,530  The Nifty PSU Bank index is seen quoting above its 20-DMA for the third straight trading session. The near-term bias is likely to remain positive as long as the index holds above 6,225; below which the next significant support stands at 6,150. On the upside, the index can potentially rally to 6,600 levels, with interim resistance likely around 6,440 and 6,530. CLICK HERE FOR THE CHART