Nifty Bank outlook: Buy on dips; ICICI Bank, HDFC Bank show signs of reversal

Nifty Bank exhibited a sustained increase in buying interest since the prior trading session, signaling a significant reversal from the bottom and sustaining an upward momentum. Notably, the banking index has found support at the 200-day Exponential Moving Average (EMA), indicating a level of price stability in the market.

The Relative Strength Index (RSI) momentum indicator currently indicates strength, trading near the 50 level. For positional traders, a decisive move above the 44,000 level could trigger a rally towards the 44,200-44,400 range. The support zone is identified within the 43,300-43,200range. Notably, private banks such as HDFC Bank and ICICI Bank exhibited promising signs of a reversal from bottom levels, contributing to the overall strength in the index.

Nifty Bank November futures traded at a premium of 25.9 points compared to the Bank Nifty spot price. Turning attention to options, the Open Interest (OI) distribution for Nifty Bank Put options underscores the highest concentration at the 43,500 level, which is likely to act as a significant support level for the current expiry. On the Call side, notable OI concentrations are observed at the 44,000 and 44,200 strikes, suggesting potential resistance for the ongoing expiry.

Traders and investors are advised to consider buying opportunities on market dips in Nifty Bank while implementing a suitable stop-loss strategy below the mentioned support levels. It's crucial to monitor the price action around key levels and remain vigilant regarding potential resistance zones identified through OI concentrations in Call options.

(The author of this article is Executive Director at Choice Broking)

Disclaimer: Recommendations provided in this article and/ or any reports attached or relied on herein are authored by an external party. The views expressed herein are those of the respective authors/ entities, and do not represent the views of Business Today (BT).

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