Bank Nifty snaps three-day gaining streak, here's what analysts say

The 12-stock Bank Nifty saw profitbooking on Monday and closed lower after three sessions of gains. The losses on the counter came after the index hit a record high of 60,114. Later, the banking index slipped 71 points to 59,681. BSE bankex too closed 78 pts lower at 66,867.   

Vatsal Bhuva, Technical Analyst at LKP Securities said, "Bank Nifty closed with a bearish candlestick in Monday’s session, signaling selling pressure at higher levels. A mild negative divergence in RSI indicates a cautious stance, with a possibility of profitbooking and short-term retracement in the index. However, the medium-term outlook remains bullish as long as the index sustains above 58,500 levels. In the short term, the sentiment turns slightly bearish and traders should remain cautious. Key support levels are placed at 59,200 and 59,000, while resistance is seen around the 60,000 mark."

The profit-booking was in line with Sensex and Nifty, which closed lower in the current trading session. While Sensex slipped 64 pts to 85641, Nifty closed 27 points lower at 26,175. 

Hrishikesh Yedve, AVP Technical and Derivative Research, Asit C. Mehta Investment Interrmediates said, "Technically, on the daily chart, the Bank Nifty has formed an Opening Marubozu (red candle) candlestick pattern, reflecting selling pressure at higher levels. As per this formation, as long as the Bank Nifty remains below 60,114, the upside is likely to remain capped in the short term. On the downside, immediate support is placed near 59,400 followed by 59,000. Therefore, short-term traders are advised to adopt a buy-near-support and sell-near-resistance approach."

On Bank Nifty, seven stocks closed lower. HDFC Bank, SBI, Axis Bank, IndusInd , Canara Bank, Federal Bank and AU Small Finance Bank were the losers on the banking index today. On the other hand, Kotak Mahindra bank (1.09%), Bank of Baroda (1.98%), ICICI Bank, IDFC First Bank and PNB were the gainers on the banking index today.