ICICI Bank shares may outperform Nifty Bank; Kotak Bank, SBI and PNB may do well

Nifty Bank reached an all-time high level of 46,369.50, before closing last week at 46,075.20, which was also its record closing high. The index was up 2.80 per cent for the week.

On the weekly chart, the banking index formed a bullish candle and gave a breakout above the previous all-time high of 45,655.50. This bullish momentum will continue as the index is showing strength on the weekly chart. The RSI momentum indicator is currently trading at 70 level. If the index moves on the higher side, we expect ICICI Bank to outperform the Nifty Bank index. Also,Kotak Mahindra Bank can be another frontrunner in the private banking space. Among PSU banks, SBI and PNB are expected to move higher and deliver a decent gain this week.

The Nifty Bank July futures are trading at a 95.10-point premium to the Nifty Bank spot.

The open interest (OI) distribution for Nifty Bank Put options shows that the 46,000 strike has the highest concentration, which may act as support for the current expiry. Nifty Bank Call strikes of 46,500 and 47,000 saw significant OI concentrations and may act as resistance for the current expiry.

A breakout above the all-time high level of 46,359.50 on Nifty Bank can further push the index towards the 47,000 mark.

A strong support for the index is placed at 44,650 level, which is also its 20-day EMA level. If the Index closes below the mentioned support, the momentum will shift to downside. It is recommended that traders should ‘buy the dips’ near 45,500, with proper stop loss below the support mentioned, for the target of 47,000.

Bagadia is Executive Director of Choice Broking)
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