Nifty Bank Outlook: Profit posting likely higher; Kotak, Axis Bank may be doing well

On the weekly chart, Nifty Bank made a high of 41,530. The index closed the week at 40,990.85, which was higher than last week’s close. The index maintains above 50 DMA on the weekly scale, indicating bullishness in the long run.

On the daily chart, the Index is trading within a defined range and holding the immediate support at the 40,350 level.

The Momentum Indicator’s Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are in neutral zone.

Among private lenders, we believe that Kotak Mahindra Bank and Axis Bank would be frontrunners. While in the PSU banking package, SBI and Bank of Baroda may show gains in the coming week.

Nifty Bank’s future ended Friday at 41,160 points, a premium of 169 points. It suggests that the bulls are still active. The Nifty Bank Put options open interest (OI) distribution shows that the 40,000 strike has the highest OI concentration, which can support the current expiration.

Nifty Bank Call strike of 41,500 level, followed by 42,000, witnessed significant OI concentrations and may act as resistance to current expiration.

We witnessed long formations in the banking world. The index has nearly ended the series at its peak. Looking at the data, the number of rollovers in Nifty Bank was 77 percent versus the average of 81 percent. The rollover indicates that short positions from the October series have not been rolled over.

However, the market may witness some consolidation or profit posting from higher levels after the recent sequential rise.

Therefore, the best strategy for the coming days would be to keep making small gains with trailing stop loss as long as it maintains a level of 40,350.

(The author is executive director at Choice Broking)

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