Nifty Bank made a weekly high of 43,339.15 and eventually ended the week at 42983.95. The banking index has closed above the previous week's closing, with a 1.29 per cent gain.
On the weekly chart, the index is sustaining above the 21-DMA and the level would be acting as the necessary support.
A momentum indicator RSI and MACD are currently in the positive zone. Among private banks, we expect ICICI Bank and IndusInd Bank would be a frontrunner. While among PSU banks, Bank of Baroda and Canara Bank, and PNB are standing strong and may deliver decent gains in the coming week.
Nifty Bank November futures traded with a premium of 286 points.
The Nifty Bank Put options distribution shows that 42,000 have the highest open interest (OI), which may support current expiry. Nifty Bank Call strike at 43,500 followed by 44,000 witnessed significant OI concentrations and may act as resistance for the current expiry.
Nifty Bank has seen aggressive long rollovers from the previous series to the December series. This means traders, who were bullish earlier, have maintained their stance, rolling over their positions in the next month’s contracts as well.
In the new series, FII Long exposure in the index futures has strengthened significantly to 77 per cent from the previous month's 59 per cent.
Nifty Bank is moving in a positive upward channel with a higher high-higher low formation.
A strong base is placed around the 41,800-42,000 zone. Traders and investors should keep booking small profits with trailing stop losses. The index reflects the state of the economy, while the broader markets reflect corporate earnings and growth that is beginning to accelerate.
(The author of this article is Executive Director at Choice Broking)
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