Nifty Bank Outlook: Index support at 44,600 level; all eyes on PNB, IndusInd Bank, Kotak Bank

Nifty Bank made a high of 44,589.85 to settle last week at 43,723.05, down 1.28 per cent. On the weekly chart, the banking index formed a Bearish candle, which put a break on the bullish momentum. The RSI momentum indicator is currently trading at the 48 level. The low of the bearish candle is around 43,558.10, which nears a strong support for the index. If the index moves on the higher side, expect Kotak Mahindra Bank Ltd to outperform Nifty Bank. Also IndusInd Bank Ltd can be another front -runner in the private banking pack. Among PSU banks, Punjab National Bank Ltd (PNB) and Canara Bank Ltd are expected to move higher and deliver decent gains in coming week. 

The Nifty Bank October futures traded with a 15.7-point premium to the Nifty Bank spot.

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

On the weekly chart, one can see an immediate resistance at 44,500-44,650 levels, which is also close to its 20- and 50-day EMA levels.  A strong support is located at 44,600 level. If the Index closes below the mentioned support, the momentum will shift to downside.

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

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