Nifty Bank Outlook: Index support at 21-DMA; ICICI, HDFC Bank, SBI, BOB & Canara Bank may do well
Nifty Bank reached a high of 43,515.05 on the weekly chart and eventually settled the week at 43,103.75, up 0.28 per cent over its previous week’s closing level.
The banking index is maintaining above the 21-DMA on the weekly chart, which may remain a crucial support for the index. Both the momentum indicators MACD and RSI are currently in the positive territory. We anticipate ICICI Bank and HDFC Bank to be the front runners among private banks. While PSU Banks like Bank of Baroda, Canara Bank and SEBI are solid and could post respectable gains in the upcoming week.
Nifty Bank December futures are trading in at a premium of 217.05 points. The strike of 43,000 has the largest Put options open interest (OI) concentration, which may provide support for the present expiry. Significant OI concentrations were seen near at 43,500 Nifty Bank Call, which could serve as barrier for the current expiry.
Aggressive long rollovers from earlier series to the December series have been observed in Nifty Bank. This indicates that traders who had previously taken a bullish posture have kept it and are rolling over their bets into the following month’s contract as well.
Nifty Bank is in a positive rising channel with a higher high-higher low pattern.
A strong base is positioned in the 42,300тАУ42,500 zones. Should the index decline below these levels, the momentum would be highly skewed. Traders and investors can continue taking out tiny profits with a trailing stop loss.
(The author of this article is Executive Director at Choice Broking)
