ICICI Bank, Axis Bank may drag Nifty Bank bank lower this week: Sumeet Bagadia

Nifty Bank index made a high of 45,096.85, before closing last week at 44,199.10 levels, down 1.52 per cent. On the weekly chart, the banking index has formed a Bearish candle. This candle has put a break on the bullish momentum. The RSI momentum indicator traded at the 55 level, shifting its momentum downwards.The low of the bearish candle stood at 44,120.90 level, close to the closing levels.

On the daily chart, one can witness a breakdown of ‘Head and shoulder’ pattern, which is bearish for the index. Banks such as ICICI Bank and Axis Bank will lead the index downwards,  If the index moves on the higher side, we expect IndusInd Bank to outperform the Nifty Bank index in the private banking pack. PSU banks such as Punjab National Bank and IDBI Bank are expected to move higher and deliver a decent gain this week.

The Nifty Bank August futures traded at a 277.90-point premium to the Nifty Bank spot.

The open interest (OI) distribution for Nifty Bank Put options shows that the strike of 43,000 has the highest concentration, which may act as support for the current expiry. Nifty Bank Call strikes of 44,500 and 44,800 witnesses significant OI concentrations and may act as resistance for the current expiry.

On weekly charts, we can witness an immediate support near 43,900. If Nifty Bank sustains below the mentioned level, it can move towards the lower levels of 43,400.

Nifty Bank has strong resistance of 45,200 level, which is also 20 Day EMA levels. If Nifty Bank crosses the mentioned resistance, it can move higher towards the all-time high levels. A strong support is located at 43,400, if the Index closes below the mentioned support, we can witness further down move.