Nifty Bank made a intra-week high of 42,716.80, before settling this past week at 42,371.25 level. The banking index delivered 0.43 per cent return for the week. During the week, the index moved below the support of 50-DMA, but Friday’s recovery put the bears in check. Technically, the immediate support for the index has shifted to 41,500-41,200 level. The immediate resistance for the index is placed at 43,800. Momentum indicators RSI and MACD are in neutral zone.
Among private banks, ICICI Bank and IndusInd Bank could lift the Index. Among PSU banks, Canara Bank can hold the command.
In the F&O segment, Nifty Bank January futures closed the week with 112 points premium. On the options side, Nifty Bank Put options distribution showed that the 41,500 level, followed by the 41,000-strike, have highest open interest (OI) concentration, which may act as support for the current expiry. Nifty Bank Call of 43,000 strike, followed by 43,500 strike, witnessed significant OI concentration and may act as resistance for the current expiry.
On the weekly chart, the index formed a Doji candle, indicating indecisiveness among buyers and sellers. In coming days, expect more volatility.
The index is moving in consolidation range, but some buying opportunities cannot be ruled out. PSU banking stocks could show some bounce back in coming days and that it would be a good time to enter them for short term buying. The bulls would try to attain the 43,000 level, as selling far-options would be an opportunity for option sellers. However, unless, 43,500 levels are taken out, investors should remain cautious. Long term investors can buy high-quality banking stock at these prices.
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