Sumeet Bagadia, Executive Director at Choice Broking, has identified promising opportunities within the Nifty Bank index. As of the special trading session on Saturday, Nifty Bank closed 0.17% higher at 48,199.50. This movement comes amid a day of market closure due to the General Elections, with all equity and derivative segments shut.
Bagadia has a cautiously optimistic outlook, suggesting that Nifty Bank could exhibit a sideways to bullish trend in the coming week. He identifies key resistance levels at 48,700-49,000, while support levels are expected at 47,750-47,500. This technical analysis indicates that while there are hurdles to overcome, the index has the potential to advance if certain conditions are met.
In the event of a bullish movement, Bagadia has highlighted four banking stocks that could benefit from this upward trajectory. From the private banking sector, Axis Bank Ltd and HDFC Bank Ltd are poised to make significant gains. In the public sector, Indian Bank and State Bank of India are expected to outperform.
Looking ahead, the sub-index encounters formidable resistance near the 48,500 level. If it moves upward, Axis Bank Ltd and HDFC Bank Ltd in the private banking sector can move higher with notable contributions. And from the PSU bank space, Indian Bank and State Bank of India have potential to outperform in the coming week.
Bagadia
The resistance levels for Nifty Bank are not only psychological but also technical, with substantial open interest seen at 48,500 and 49,000 call strikes. These levels indicate where traders anticipate the most significant selling pressure. Conversely, put options are heavily concentrated at 48,000 and 47,500, indicating strong support zones.
Bagadia’s analysis on the daily charts reveals a subtle resistance around the 48,650 level. A sustained breach above this could propel the index towards the next significant resistance at 49,100. “Traders and investors should closely monitor price movements around this resistance for potential breakout opportunities and gauge the strength of the upward momentum in Nifty Bank.”
The market’s performance is further influenced by the ongoing election results and their impact on investor sentiment. Prime Minister Narendra Modi has addressed concerns, urging calm amidst market fluctuations. Market participants are keenly watching these developments, as the election outcomes could dictate future market trends.
With 11 stock market holidays in May 2024, including weekends, trading sessions are limited, adding a layer of complexity to market predictions. The markets are set to reopen on Tuesday, May 21, 2024, which will be closely watched by traders and investors alike.
While the Nifty Bank faces resistance, the potential for upward movement remains. Axis Bank, HDFC Bank, Indian Bank, and SBI stand out as key players poised to benefit if the index breaks through its resistance levels. As always, traders should remain vigilant and monitor market movements closely, especially around critical resistance zones.
The coming days will be crucial in determining whether Nifty Bank can maintain its bullish momentum or if it will encounter substantial resistance. Either way, the highlighted bank stocks present interesting opportunities for those looking to capitalize on potential gains within the banking sector.
