The market saw high volatility last week, thanks to heavy selloffs in global markets. During the week, Nifty Bank made an all-time high of 44,151.80, but closed the week at 43,219.50, down 0.95 per cent.
At present, the banking index has the support of 21-DMA on the daily chart. The immediate support for the index has shifted to 42,600-42,200 while its resistance is placed at 44,150.
Momentum indicators RSI and MACD are currently in the neutral zone.
The index has managed to claim a new high during the week, as the HDFC twins outperformed, supported by SBI.
Among private banks, IndusInd Bank could be a front-runner. While in the PSU banking space, SBI can still hold the command.
Nifty Bank November futures traded at a premium of 85 points.
In the options segment, Nifty Bank Put options distribution shows that the 42,000 strikes had the highest open interest (OI) concentration, which may act as support for the current expiry.
Nifty Bank Call’s 43,000-strike, followed by 44,000, witnessed significant OI concentrations and may act as resistance for the ongoing expiry.
After a sustained increase, the market may experience some consolidation, as investors would book some profits from higher levels.
Overall, the banking sector remained under pressure after the Fed and RBI MPC policy reviews. Next week, there could be more triggers in the private banking space as OI data indicates more call option writing is seen at higher strike prices.
The weekly chart indicates slight bearishness for the next few days. However, the primary trend is still bullish; in the short term, a slight pullback is always considered healthy for the long-run rise.
Nevertheless, as per historical statistics, FIIs typically sell in December when investors engage in tax-loss harvesting to reduce realised capital gains.
(The author is Executive Director at Choice Broking)
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