Nifty Bank support seen at 39,500: All eyes on Axis Bank, ICICI Bank, SBI and BOB

Nifty Bank made a high of 41,292.60, before closing the week at 39,909.40, up 2.97 per cent. On the weekly chart, the banking index is staying below 200-day EMA, which is at 40,000. A momentum indicator RSI is currently showing weakness.

If the market recovers, we expect private banks such as Axis Bank and ICICI Bank would be front runners. Among PSU banks, SBI and Bank of Baroda would be moving higher and may deliver decent gain in the coming week. Nifty Bank has a strong support at 39,500 levels. If the index breaks the given support, HDFC Bank and Kotak Mahindra Bank will lose more than the index.

Nifty Bank March futures traded with a premium of 248 points.

Nifty Bank Put options distribution shows that the 39,000 strike has the highest open interest (OI) concentration, which may act as support for the current expiry. Nifty Bank Call strike of 41,000, followed by 41,500, witnessed significant OI concentrations and may act as resistance for the current expiry.

In the new series, FII’s long exposure in index futures is at a lower side of 19 per cent.

Nifty Bank has a strong support near the 39,500 level. If the index closes below the mentioned support, the breakdown can lead Nifty Bank towards 37,500 level.

A strong resistance is placed around 41,500-42,000 levels. If the index breaches 41,500, which is also its 50-day EMA, the momentum would be skewed on higher side. Traders should keep booking small profits with a trailing stop loss.

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

Also read: Nifty at sub-17,500 level. Can it stage recovery next week?

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