Banking stocks are on a Dream run! PSU banks which were neglected by most of the traders gave whooping returns overnight on the news of Bank recapitalization by our Finance minister. After such a quick returns, you would be feeling its enough for Banking Stocks?… “I Believe its just the new beginning”
Fundamentally many banking stocks are still reporting higher NPA but i think they are cleaning up its past mistakes. And as we know, market discounts future expectations, which is the reason supporting current rally on bank index. For the short term trend lets catch up with daily charts of Nifty bank where we have seen some breakout from consolidation pattern. As we can notice in the chart, Nifty bank index has moved out of “Rectangular Formation” which was intact since late June’17. During this formation, it has triggered a start of Wave 3 of a smaller degree of trend which has now support at 24800 with minimum tgts of 26000/26320 on the upside. Indicators are also moving with a strong strength for a new high. Now for a quarterly view i feel 24300 is the maximum downside where we have a gap unfilled and 20 day Moving average support.
So view: Hold existing longs on Nifty bank with tgts of 26000/26320 or buy fresh near to 25000 in near future with stop loss of 24300.