Bank stocks to buy: Bank stocks are going through a good rally and it doesn’t look like it’s coming to an end anytime soon. However, the Nifty Bank fell 211 points to 39,456 and formed a small bullish candlestick pattern on the daily scale during the last trading session. The key pivot level, which will act as crucial support for the index, is placed at 39,285, followed by 39,115. On the upside, the key resistance levels have been placed at 39,599 and 39,743 levels, experts said.
Speaking about the future outlook for Bank Nifty and key levels investors should watch for, Rajesh Palviya, VP – Technical and Derivative Research, Axis Securities said: “On the daily chart, the index has formed a bearish candle with long shadows on either side indicating extreme volatility The index is moving in an Higher Top and Higher Bottom formation on the daily chart, indicating a short term uptrend.The chart pattern suggests that if Banknifty crosses the 39,800 level and persists, it would witness purchases , which would lead the index to 40,200-40,500 levels.”
“However, if the index falls below the 39,600 level, it would witness sales, pushing the index to 39,400-39,200. Banknifty is trading above 20, 50, 100 and 200 days SMA, indicating a positive bias in the short to medium term. Banknifty remains in an uptrend in the near term, so buying on dips remains our preferred strategy. The daily strength indicator RSI remains flat and is below the reference line, indicating that there is no momentum on either side,” he explained.
In recent quarters, banks have seen healthy credit growth, strong balance sheets and improved asset quality. Rajesh Palviya, Axis Securities has picked 4 stock recommendations that are well placed to give healthy returns and their moving averages indicate a strong uptrend.
BARODA BANK
The stock manages to break out above the July 2019 swing high, showing a “V” shape recovery. above the 126 level, the stock may scale to 145-155 levels, while 126-118 is likely to act as good support levels in a minor downtrend. The stock is well positioned, especially its key moving averages indicating a strong uptrend.
FEDERAL BANK
With the close on Aug. 22 (117), the stock has finally broken out of its four-year “multiple resistance zone” on a monthly close at 111 levels. Rising volumes with each rally means increasing participation. The weekly buy signal from the “Bollinger band” points to rising momentum. The stock is in a strong uptrend, forming a series of higher highs and lows, signaling bullish sentiments. The stock is well above its 20, 50, 100 and 200 day SMAs, reconfirming the bullish trend. The near term support is around the 110-105 levels and on the downside, the above ground resistance is around the 130-155 levels.
CSB BANK
With this week’s gains, the stock has finally broken its last year’s “downtrend line” at 215 levels, signaling a trend reversal on the short-term chart. Rising volumes near this breakout zone represent increased participation. On the daily and weekly time frame, the stock has confirmed the formation of higher tops and bottoms, confirming the trend change. The bullish crossover of 50 and 100 days SMA indicates bullish sentiments. The daily, weekly and monthly strength indicator RSI is positioned positively and sustainably above its reference longevity, indicating rising strength.
DCB BANK
Since January 2021, the stock has been on a downward trend with a “down channel”, but in recent weeks, massive buys have confirmed a channel breakout at 92 levels. This outbreak is accompanied by huge volumes indicating increased participation. The weekly buy signal from the “Bollinger band” points to rising momentum. In August, the stock recaptured its 20-, 50-, 100- and 200-day SMA and recovered very sharply, reaffirming bullish sentiments. The short term support is around the 92-90 levels and on the downside, the above ground resistance is around the 120-130 levels.
The expert opinions and investment tips in this News18.com report are their own and not the website’s or its management. Users are advised to contact certified experts before making any investment decisions.
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