HDFC Bank shares may cross all-time high level of Rs 1,725 soon: Sumeet Bagaria

Nifty Bank hit an intra-week high of 42,196.20, before closing this past week at 42,132.55, up 2.66 per cent.

On the weekly chart, the index has formed a Three White Soldiers pattern, which indicates the reversal of a bearish trend. The index formed a bullish candle on the weekly chart and has also given a breakout of a downward slopping trend line. The RSI momentum indicator is currently indicating strength and stood near the 57-level. We expect HDFC BANK to cross its all-time high levels of Rs 1,725 and outperform the Nifty Bank index. Also Axis Bank can be another front runner in the private banking pack. In the PSU banking pack, SBI and Bank of Baroda are expected to move higher and deliver a decent gain in the coming week. 

Nifty Bank April Futures closed last week with a 62-point premium.

The open interest (OI) distribution for Nifty Bank Put options shows that the strike of 41,500 has the highest concentration, which may act as support for the current expiry. Nifty Bank Call strikes of 42,500 and 43,000 saw significant OI concentrations and may act as resistance for the current expiry.

Nifty Bank has strong resistance near the 42,900 level. If the index closes above the mentioned resistance level, the breakout could take it towards the all-time high levels of 44,150.

A strong support is located around 41,100-41,300 levels; if the Index closed below the mentioned support, the momentum will shift to downside. It is recommended that traders should buy the dips in Nifty Bank with proper stop loss below supports mentioned.

Support: 41100-41300
Resistance: 42700-42900
Bias- Sideways to Bullish

(The author is Executive Director Choice Broking)