In Tuesday's session, the Nifty PSU Bank index zoomed over 7 per cent.
PSU bank stocks have been on a roll since the past one month. The Nifty PSU Bank
index has jumped around 34 per cent during the period (From November 9 to December 8) as compared to a 7.4 per cent gain in the benchmark Nifty50 index, NSE data show.
On Wednesday, too, the index was trading 0.7 per cent higher at 1,871 levels with 10 out of 12 constituents advancing. In Tuesday's session, the Nifty PSU Bank
index zoomed over 7 per cent amid healthy buying in counters such as Canara Bank, Punjab National Bank (PNB), Indian Bank, and Bank of Baroda. READ MORE
So, is the rally in PSU bank stocks sustainable, and should you invest in these stocks? Here's what the charts suggest.
NIFTY PSU BANK:
As the index managed to cross the 50-weekly moving average (WMA) at 1,565 levels, the upward trend is indicating a rally towards 2,186 levels, which is its 100-WMA. This move is supported by the Moving Average Convergence Divergence (MACD), which is attempting to conquer the zero line. If that happens, then the upside rally may see a strong momentum with corrective moves witnessing buying and accumulation. CLICK HERE FOR THE CHART
State Bank of India (SBIN):
The counter has rallied near 200-WMA placed at Rs 273.60. Going forward, if the stock manages to cross this moving average decisively, which seems to be possible, then an upside towards Rs 340 and Rs 360 may be anticipated. The immediate closing basis support stays at Rs 260 levels. The weekly volumes have gone sluggish, yet the stock price is not showing any weakness. CLICK HERE FOR THE CHART
Bank of Baroda (BANKBARODA):
A breakout of the “Double Bottom” suggests a rally towards Rs 82 levels, as per the weekly chart. This move is supported by strong volumes, which are showing an increasing trend. A closing basis support stays at Rs 60 levels. And the medium-term stays optimistic till the counter manages to sustain above Rs 50 levels. CLICK HERE FOR THE CHART
Canara Bank (CANBK):
A continuous resistance at Rs 120 was conquered aggressively suggesting a strong upward momentum. This may see higher levels of Rs 160 and Rs 175 as the volume structure reflects a firm interest of market participants. The next resistance falls at Rs 180 levels. A closing basis support comes in at Rs 117 levels. CLICK HERE FOR THE CHART
Punjab National Bank (PNB):
A “Double Bottom” formation exhibits a trend in the direction of Rs 50 levels. This counter is firmly absorbing the selling pressure in the range of Rs 40 to Rs 38 levels. The stock strength should see more addition of volumes shortly, as per the weekly chart. The Relative Strength Index (RSI) has crossed the resistance of 50 value. This indicates strength will be on the side of the bulls. The trend is optimistic till the stock holds Rs 35 levels. CLICK HERE FOR THE CHART