Banking stocks came under pressure on Monday, dragging the Nifty Bank index down over 370 points, or nearly 0.7%. The index underperformed the benchmark Nifty 50, which posted only marginal losses. Analysts highlighted key technical levels that traders should watch in the near term.
The Nifty Bank index fell to 53,869, as seen at 12.30 pm. Union Bank of India, Punjab National Bank (PNB) and Canara Bank shares dropped around 2% each to lead losses. Bank of Baroda, Kotak Mahindra Bank, Axis Bank, ICICI Bank and State Bank of India (SBI) fell around 1% each.
AU Small Finance Bank, IndusInd Bank, IDFC First Bank and Yes Bank shares were trading in the red with marginal losses, while HDFC Bank and Federal Bank shares bucked the trend to trade in the green with marginal gains.
Technical view on Nifty Bank
Bajaj Broking had noted that Nifty Bank in the daily chart formed a bearish candle with a lower high and a lower low highlighting selling pressure at higher levels, as the index closed below the 20-day EMA level on Friday.
Going ahead, the brokerage expected the index to consolidate in the range of 52,500 - 56,000. “Only a breakout or a breakdown from this range will signal the next direction movement,” it said. On the downside, it saw the index finding immediate support first at 53,970 and then at 53,650. The index has now already breached the first support level suggested by the brokerage and is heading towards the next. On the upside, however, it sees resistance near 54,610 and then at 54,900.
Axis Securities, meanwhile, had said that the trend-deciding level for the Nifty Bank index is 54,513. “If Bank Nifty trades above this level, it may rally up to 54,910-55,582-55,979 levels. However, if it trades below 54,513 levels, we may witness profit booking in the market, and the index may correct up to 53,842-53,445-52,774 levels,” it added.
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Bharat K Gala, Technical Head at Ventura, held a negative weekly outlook for Nifty Bank. He said that as long as the index trades below 54,116, traders should use 53,930-(52,072-49,430) levels as an opportunity to buy. “If the trend is strong, Bank Nifty will bounce back from 52,072 levels; any close below should be treated as negative for the current uptrend. Currently, we see (55,920-57,040)-57,940-(58,840-60,130) as sell level areas,” he added.
Also read: Nifty has a positive undertone, but Street waits for a decisive breakout
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
