Nifty Bank outlook: Strong resistance near 50-day EMA at 44,650 level; PNB, SBI shares may do well

Nifty Bank made a high of 44,212.75, before closing last week at 43,851.05 level, down 0.79 per cent. On the weekly chart, the banking index formed a Bearish candle. It hit a low of 43,600.35 during the week. The RSI momentum indicator traded at around 53 level, shifting its momentum downwards. The low of the bearish candle can be a strong support for the index. 

On the daily chart, the index saw sideways consolidation for three sessions and stayed near its support of 43,600 level. If the aforementioned support level is broken, one can witness further bearishness in Nifty Bank.  Private lenders such as ICICI Bank and HDFC Bank will lead the index fall.  If the index moves on the higher side, we expect IndusInd Bank to outperform the Nifty Bank index. Among PSU banks, PNB and SBI are expected to move higher and deliver decent gains in coming week. 
The Nifty Bank August futures traded at a 113.65-point premium to the Nifty Bank spot.

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

On weekly charts, one can witness a smaller support in the range of 43,400-43,600. If Nifty Bank falls below the mentioned range, it can move towards the levels of 42,800. 

Nifty Bank has strong resistance of 44,650 levels, which is also 50 Day EMA levels. If Nifty Bank crosses the mentioned resistance, it can move higher towards the all-time high level.

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