So far in the calendar year 2021, the Nifty PSU Bank index has zoomed 34 per cent on the NSE
Stocks of public sector banks (PSBs) were on a tear on Monday, their rally fuelled by stellar March quarter results by India's largest PSB State Bank of India (SBI). Nifty PSU Bank index was the top performing stock on the National Stock Exchange (NSE), up 2.7 per cent at 11:21 AM, as against a 0.34 per cent gain in the benchmark S&P BXSE Sensex.
shares gained 4.4 per cent to quote at Rs 419 on the NSE in the intra-day trade, having rallied 9 per cent in the past two trading days, after the bank on Friday reported a strong performance on the asset quality front wherein slippages and restructuring were within guidance while sufficient provisioning buffer also provided comfort. The stock of the state-owned lender was trading close to its record high of Rs 426.45 touched on February 18, 2021. READ ABOUT IT HERE
Meanwhile, shares of Punjab and Sind Bank, Punjab National Bank, Central Bank of India, Canara Bank, Indian Bank, and Indian Overseas Bank surged between 2 per cent and 5 per cent on the NSE.
So far in the calendar year 2021, the Nifty PSU Bank index has zoomed 34 per cent on the NSE on hopes of privatisation of select banks, better-than-expected corporate earnings, economic recovery post Covid-19 blow. In comparison, the frontline Nifty index is up 8.2 per cent, data show.
Given this massive outperformance, should you chase the rally? Here's what charts say:
NIFTY PSU BANK
A perfect "Inverse Head and Shoulder" pattern indicates bullish bias on the chart for upcoming sessions. The pattern is indicating an upside rally towards 2,500 levels. Till the index defends the support of 2,200 levels, the positive bias is expected to witness buying despite intermittent profit-booking. The Moving Average Convergence Divergence (MACD) has conquered the zero line upward, suggesting positive sentiment. CLICK HERE FOR THE CHART
State Bank of India (SBIN)
Rs 450 (after the breakout above Rs 420 mark)
The stock needs to conquer the resistance of Rs 420 levels, as per the daily chart, to unlock next leg of rally. While the medium-term outlook has a support of the 100-days moving average (DMA) at Rs 349.80 mark, the immediate support is placed at Rs 390 levels. As long as this support is held, the stock may continuously attempt to cross Rs 420 mark aggressively. A breakout may result in a rally towards Rs 450 levels. CLICK HERE FOR THE CHART
Bank of Baroda (BANKBARODA)
A decisive close above Rs 75-mark has opened doors for Rs 90 levels. The MACD has crossed the zero line upward, indicating a positive rally. The counter needs to defend the support of Rs 75 on closing basis to stay in the bullish momentum, daily chart shows. Volumes, too, have been supportive of the positive bias. CLICK HERE FOR THE CHART
Canara Bank (CANBK)
Rs 170 (after breakout the resistance of Rs 158 levels)
This counter needs to conquer the resistance of Rs 158 mark to breakout on the upside. A stable move above 60 value on the The stock of this PSU bank is currently trading around the resistance of Rs 158-mark. A stable move above 60 value on the Relative Strength Index (RSI) suggests further upside towards Rs 170 mark if the resistence is conquered decisively. The stock has a support of Rs 145 levels, as per the daily chart. CLICK HERE FOR THE CHART
Punjab National Bank (PNB)
Rs 42 - Rs 44 (after breakout above Rs 39.50 )
5% - 10%
The "Inverse Head and Shoulder" has a breakout above the neckline of Rs 39.50 mark. This may result in a rally towards Rs 42 and Rs 44 levels. Volumes on the counter have been supportive of the upmove, as per the daily chart. The medium-term outlook is optimistic as long as the counter defends Rs 35 levels. CLICK HERE FOR THE CHART
Union Bank (UNIONBANK)
Rs 44 (after a breakout above 39)
The stock is expected to witness a breakout if it closes above Rs 39 levels. When that happens, the rally may take the stock towards Rs 44 mark, as per the daily chart. The MACD has sustained above the zero line, indicating upward bias. The momentum will build further above the breakout. The immediate support comes at Rs 36 levels. CLICK HERE FOR THE CHART