Nifty Bank outlook: Buy the dips; IndusInd Bank, Axis Bank shares may outperform index

Nifty Bank made an intra-week high of 44459.25 this past week, which was near all-time high level. It settled the week at 43,989, up 0.12 per cent.

On the weekly chart, the banking index has formed a bearish candle along with an Inside candle. The RSI momentum indicator is currently trading around 62 level. If the index moves on the higher side, we expect IndusInd Bank to outperform the Nifty Bank index. Also, Axis Bank can be another front runner in the private banking pack. Among PSU banks, Canara Bank and Bank of Baroda are expected to move higher and deliver a decent gain in the coming week.

Nifty Bank May futures traded with 121.10-point premium to the Nifty Bank spot.

The open interest (OI) distribution for Nifty Bank Put options shows that the strike of 43,500 has the highest concentration, which may act as support for the current expiry. Nifty Bank Call strikes of 44,500 and 45,000 saw significant OI concentrations and may act as resistance for the current expiry.

A breakout above the all-time high level of 44,498.60 on Nifty Bank may further push the index towards the 45,000 level.

A strong support is located at 43,400-43,550 levels; if the Index closes below the mentioned support, the momentum will shift to downside. It is recommended that traders and investors should buy the dips in Nifty Bank with proper stio loss below the supports mentioned.

(The author is Executive Director at Choice Broking)

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