The Nifty Bank index hit a fresh record high on Monday tracking positive global cues but witnessed some selling pressure at higher levels.
Experts see some consolidation at higher levels but dips, if any, can be used as a buying opportunity, they say.
The Nifty Bank hit a record high of 47,588 on Monday. It closed with gains of over 50 points to close at 47,314. The Nifty50 closed 27 points higher at 20,997.
Top gainers include names like PNB, Bank of Baroda, IndusInd Bank, and ICICI Bank while some selling was seen in Axis Bank, IDFC First Bank, Federal Bank, and HDFC Bank.
The Nifty Bank index has risen more than 5% in a week, and over 8% in a month to hit a fresh record high – in line with benchmark indices.
Tracking the momentum, the index is now trading in an overbought zone; hence, some consolidation could be on the cards.
The Relative Strength Index (RSI) is at 79.0. RSI above 70 is considered overbought. This implies that the stock may show a pullback.
“Bank Nifty continued its up move and closed with marginal gains. It faced selling pressure around the 47,500 levels. Thus, going ahead we can expect some consolidation,” Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas, said.
“The range of consolidation is likely to be 46800 – 47500. Overall, the trend is positive, and dips should be used as a buying opportunity,” he said.
Ket Levels To Track:
Bank Nifty Index opened flattish and hit a new lifetime high of 47588 marks in the first half of the session. The index formed a small-bodied candle with a long upper shadow that suggests momentum is fizzling out at higher levels.
“Nifty Bank has formed a small-bodied Bullish candle on a daily scale and has been forming higher highs – higher lows from the last two sessions,” Chandan Taparia, Analyst-Derivatives at Motilal Oswal Financial Services Limited, said.
“Now it has to continue to hold above 47,250 zones, for an up move towards 47,588 then 47,750 levels while on the downside support is seen at 47,250 then 47,000 zones,” he said.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
