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Tech view: SBI, Canara Bank ready for a rally as RBI cuts repo rate to 6%

In the February policy, the RBI revised its forecast for India’s economic growth in 2020 to 7.4 per cent from 7.6 per cent earlier. Will it cut it further?
After a sharp rally from 10,800 to 11,650 levels from March 5 till date, Nifty50 has taken a breather as the Reserve Bank of India (RBI) announced its first bi-monthly monetary policy for 2019 - 20. In the last three sessions, the index tried to conquer 11,700 levels convincingly. It climbed a new high of 10761 but slipped to 11,650. A rate cut would have boosted the market sentiment.  

Rate sensitive stocks had been on a roll ahead of the policy with the Nifty PSU Bank index rising 20 per cent and the Nifty Private Bank index that rose 12 per cent during this period. Among stocks, Andhra Bank and Bank of Baroda surged over 26 per cent, followed by Canara Bank, State Bank of India (SBI) and Punjab National Bank (PNB), which rose 22 per cent each. 

Given this rally, most banking stocks are indicating a breakout if the index holds current levels. SBI is showing 'Symmetrical Triangle' pattern in the weekly chart. 

Here's how leading PSU banks look on the charts:

State Bank of India (SBI): It is one of the top contenders for an upside breakout, as the chart formation on a bigger time frame reveals sizable upward trend once the stock conquers Rs 340. Surprisingly, over a period of 10 years, the stock failed to sustain above Rs 300. The delivery volumes looks below-average. However, if the stock manages to cross Rs 340, we may see more buying come in. The stock has seen buying in the range Rs 290 – Rs 280, which eventually will stay as a support for the counter. The resistance comes at Rs 372 and 395 levels. CLICK HERE FOR A DETAILED CHART

Canara Bank (CANBK): The stock has been resisting to break above its 200-weekly moving average from the last six months. Currently, it appears to hold the momentum as it trades above the same with stable volumes. The chart shows the stock heading towards Rs 322 and Rs 340 in the coming sessions.CLICK HERE FOR A DETAILED CHART

Bank of Baroda (BANKBARODA): The stock has broken out of “Falling channel pattern” rising above downward trend line as per the weekly chart. The RSI is trading at 61, still far from overbought reading of 70. The immediate trend on the chart indicates Rs 150 level, which is its 200WMA. The range of Rs120- Rs 115 has seen reversal lately, stays as support range. CLICK HERE FOR A DETAILED CHART 

Punjab National Bank (PNB): The MACD (moving average convergence and divergence) has crossed zero line as per the weekly chart. The volumes have started picking up with the appreciation in price. The gap between two exponential moving average 12 - 26 days average and 9 days average is widening gradually indicates stablity returning. The stock is heading towards Rs 120 and has  a support at 85 levels.CLICK HERE FOR A DETAILED CHART

Allahabad Bank (ALBK): After witnessing a breakout on “Inverse Head and Shoulder in the weekly chart, the stock is trading sideways. It is heading towards 100WMA, crossing of which will take it towards Rs 65 and Rs 72. Support remains at Rs 48 and Rs 45. So far, the chart looks attractive for buying opportunities around Rs 50 levels.CLICK HERE FOR A DETAILED CHART

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