ICICI Bank, HDFC Bank shares may do well; PSBs SBI, Bank of Baroda may hog limelight: Sumeet Bagaria

Nifty Bank made an intra-week high of 42,603.55, before ending this past week at 42,118, down 0.03 per cent. The index formed a bearish candle on the weekly chart.  

The banking index is sustaining above its 100-EMA on the daily chart, which would be acting as a key support for the index going ahead.

The RSI indicator stood at the 57 level while the MACD was skewed on the positive side. Among private banks, we expect ICICI Bank and Axis Bank to be frontrunners. In the PSU banking pack, SBI and Bank of Baroda may see some expansions this week.

Nifty Bank April futures ended last week with 7 points premium.

Nifty Bank Put options distribution shows that the strike of 41,000 has the highest open interest (OI) concentration, which may act as a support for the April month expiry. The Nifty Bank Call strike price of 42,500, followed by 43,000, witnessed significant OI concentrations and may act as resistance for this expiry.

Index traded in a very narrow range past week that suggests some indecisiveness among Call and Put writers. Simultaneously, the volatility Index has eased, which led to the shrink in premium that suggests the bulls could dominate in the next few weeks.  The banking index is consolidating in a defined range but it would catch up directional movement once it sustains above the 42,600 level.

Strong base is placed around the 41400 zone. However, banking stocks were primarily responsible for holding back Nifty, as almost all banks appeared to be somewhat fatigued, and it appears that some sort of small correction cannot be ruled out. 
Upcoming quarterly results of would be key triggers for this week.

(The author is Executive Director at Choice Broking)