Springing a surprise, the Reserve Bank of India (RBI) on Wednesday reduced the repo rate by 35 basis points (bps) to 5.5 per cent to spur economic growth. However, the move failed to cheer investors as the central bank lowered the GDP growth forecast for the financial year 2019-20 (FY20) to 6.9 per cent from 7 per cent projected earlier. Rate-sensitive stocks took a beating yeterday and settled with losses.
Over the past few years, we have seen this index consolidating in a broad range of 3,400 to 2,600 levels. It was the phase where index virtually remained consolidated and expectations were to breakout on the higher side. Nevertheless, the index breached the lower level of 2,564, its previous low, suggesting the trend is tilting on the negative side. Technically, if the index stays below 2,600 for another week, then a major breakdown may push this into a long-term bearish phase. The weekly chart shows MACD (moving average convergence divergence) falling below zero line. On the other side, a convergence of 100-day moving average (DMA) with 50-DMA has further dampened the upside move. Any reversal towards 2,700 may witness “the first level of selling” before heading towards strong pressure range of 2,775 – 2,825. The candlestick formation shows a bearish engulfing pattern – one that suggests on-going weakness, as per the daily chart. CLICK HERE FOR DETAILED CHART VIEW
PUNJAB NATIONAL BANK (PNB):
The recent formations as per the daily chart show decent reversal with volumes; however, the counter failed to conquer the breakout as follow-up buying deteriorated. A clear indication of an upside as counter crosses 50 WMA (weekly moving average) along with the support of MACD - that crossed zero line upward now shows a different scenario. As it breached the trend line support of Rs 78, the price was pushed below 50 DMA, which is at Rs 80. This has resulted in a negative trend. Furthermore, a gap down close on the weekly chart itself highlights a weak sentiment. Relative Strength Index (RSI) has failed in succeeding two positive crossovers, which suggests it is losing strength. The immediate support comes in at Rs 58, once the counter slips below Rs 63, as per daily chart. CLICK HERE FOR DETAILED CHART VIEW
BANK OF INDIA (BANKINDIA):
The stock is trading below Rs 68.30, the lowest level of 2008, after which the counter showed tremendous upside hitting Rs 184 the same year. The stock has broken significant support range of Rs 70 – Rs 68 as per monthly chart. If the counter does not see any recovery hereon, then more pessimism is likely to occur. As the RSI trades in oversold territory, nothing concrete reversal is seen and the price is falling to lower levels. The overall trend indicates counter heading towards Rs 55, although some minor support is placed at Rs 61, as per daily chart. CLICK HERE FOR DETAILED CHART VIEW
IDBI BANK (IDBI):
Since January 2019, the counter is trading below 200-DMA suggesting a weak trend. Not only did this result in erosion of price but the strength of the stock has been disseminated. Thereafter, it failed to even conquer 50 DMA decisively. The formation on the daily chart depicts lower lows, lower highs with volumes falling substantially. As the counter breached Rs 50, a downtrend has led to a bearish phase. To see a turnaround in an overall trend, the counter needs to conquer the most significant level of Rs 30 and Rs 35. As it loses strength, the momentum shows immediate support levels at Rs 21 and Rs 17. CLICK HERE FOR DETAILED CHART VIEW