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Nifty Bank Outlook: Profit booking likely at higher level; Kotak, Axis Bank may do well

Nifty Bank Outlook: Profit booking likely at higher level; Kotak, Axis Bank may do well

Rollovers in Nifty Bank stood at 77 per cent versus its average of 81 per cent. The rollover indicates that short positions from October series have not been rolled over.

Nifty Bank Call strike of 41,500 level, followed by 42,000, witnessed significant OI concentrations and may act as resistance for the current expiry. Nifty Bank Call strike of 41,500 level, followed by 42,000, witnessed significant OI concentrations and may act as resistance for the current expiry.

On the weekly chart, Nifty Bank made a high of 41,530. The index closed the week at 40,990.85, which was above the previous week's closing. The index is sustaining above 50 DMA on the weekly scale, which signals bullishness in the long run.

On the daily chart, the Index is trading in a defined range and is holding the immediate support of 40,350 level.

Momentum indicator relative strength index (RSI) and the moving average convergence/divergence (MACD) are in the neutral zone.

Among private lenders, we believe Kotak Mahindra Bank and Axis Bank would be frontrunners. While in the PSU banking pack, SBI and Bank of Baroda may exhibit gains in the coming week.

Nifty Bank future ended Friday’s session at 41,160, a premium of 169 points. It suggests the bulls are still active. The Nifty Bank Put options open interest (OI) distribution shows that the 40,000 strike has the highest OI concentration, which may act as support for the current expiry.

Nifty Bank Call strike of 41,500 level, followed by 42,000, witnessed significant OI concentrations and may act as resistance for the current expiry.

We witnessed long formations in the banking space. The index has ended the series near to high point. If we look at the data, rollovers in Nifty Bank stood at 77 per cent versus its average of 81 per cent. The rollover indicates that short positions from October series have not been rolled over.

However, the market may witness some consolidation or profit booking from higher levels after the recent successive rise.

Therefore, the best strategy for the coming days would be to keep booking small profits with trailing stop loss as long as it holds 40,350 level.

(The author is Executive Director at Choice Broking)

Published on: Oct 30, 2022, 12:04 PM IST
Posted by: Shubham Singh, Oct 30, 2022, 11:51 AM IST