With a rally of 4.4 per cent, Nifty PSU Bank index was among the top gainers in the week with Central , , and leading the upside.
, Technical & Derivative Research Analyst at
, says Bank of Baroda has surpassed its hurdle convincingly, while and Indian Bank are poised for fresh up-moves. Edited excerpts:
In the August series, Nifty proved wobbly near 18,000. What should be the strategy for the September series?
In the August series, Nifty reversed after testing its upper band of the descending channel and erased partial expiry gain. In the past, the index witnessed a substantial decline after reversing from that band. The index may oscillate in the narrow range before a direction move (most probably down side). However, a stable move above its upper band (currently placed at 17,800-level) will invalidate probable decline. In case of a breakout, the index could move towards 18,100-18,350-18,600-levels.
Do you think Nifty can sit comfortably above 18,000 in the coming month?
Due to higher level reversal in the index, the key technical indicators reversed from the overbought zone and negatively poised on the short-term timeframe chart. Hence, we believe the index may consolidate before a directional move, which could be most probably towards the downside. In case the index violates its 20-day EMA (currently placed at 17,418-level), short-term decline cannot be ruled out.
Nifty saw support at 17,345 this week. What are the key levels to watch out for next week?
In this week, Nifty witnessed a pullback after testing its 20-day EMA (then placed at 17,368-level). The index breached its prior rising trend and closed on a negative note after five consecutive up-ticks on the weekly chart. In the past, the index remained in pressure after
violating that moving average, which is currently placed at 17,418-level. In case the index slips below that average, undergoing negative momentum may accelerate for next week. This could drag the index towards 16,970-16,890-16,650-levels in near-term to short-term.
However, a stable move above its upper band (currently placed at 17,800-level) will invalidate probable decline.
Nifty Bank is exhibiting relative strength to Nifty. Which index is looking more attractive for next week?
As per the current set-up, we believe Nifty Media, Metal and Realty indices will remain in focus with a positive momentum. However, Nifty IT, Pharma and FMCG indices may remain in pressure for next week.
IT stocks are having a troubled time. Are they ripe enough to buy the dip?
We believe that IT stocks are not yet out of the woods. This space will remain in pressure for short-term to medium-term across the segment (large-cap, mid-cap and small-cap).
was among the top weekly gainers this week. What do the charts look like for next week? Is it in the overbought zone now?
Since 25th Aug ’22, the stock failed to surpass its downward sloping long-term moving average (200-day SMA), which is currently placed at Rs131 and breached its prior daily rising trend subsequently. Due to sharp up-move in the stock, its daily RSI reversed from multi-year high and may witness a negative cross-over. In the past, the stock reversed after oscillating around that moving average and tested lower levels. In case history repeats, the stock could move towards its cluster of short-term and medium-term moving averages, which are placed between Rs105 and Rs100. However a stable move above that average will negate possible down-move in the stock.
What is driving the rally in PSU banks? Which ones do you like?
In the last week, the index resumed its up-move and rose to 6-month high, but tested its medium-term supply zone, which is placed between 2,985 and 3,100 levels. In the past, the index reversed after testing that zone and witnessed a substantial decline. Though the index formed a bullish pattern on the weekly chart and other key technical indicators are also positively poised, we believe that a stable move above its supply zone will accelerate undergoing positive momentum. Bank of Baroda has surpassed its hurdle convincingly, while Canara Bank and Indian Bank are poised for fresh up-moves.