Will Banknifty Lead To Market? As Banks Are Ready For U-Turn!

In the last week, we have discussed Nifty as it was trading near support. Right now it has closed below the support, but we cannot consider it as a breakdown. The market was volatile and making green-red candles back to back. In this scenario it is difficult to predict, now it totally depends on COVID cases and death ratio. Let’s pray for all and take care of ourselves.

Nifty 50: Weekly trend is Lower Low & Lower High and index has closed below support. However, as per the candle chart there is Doji and it is the neutral sentiments so it is not breakdown. There are chances of recovery as many pharmaceutical companies are making medicines that are helpful against COVID. There is no change in the Nifty view as we have discussed in the last article.

Nifty Bank: On a weekly time frame, the index is trading near support and closed in the green in the last two weeks. It is giving a signal of a U-turn but we need confirmation so we can bullish on banks. Let’s go to the daily chart.

On a daily chart, the index has created Cup & Handle chart pattern and it is a signal of U-turn. We need confirmation that is a breakout, once the breakout will be done then banknifty will lead to the market. That means banking stocks will be a leader like HDFCBANK, SBI, and ICICI. This week having a monthly expiry week so we have to wait till the next series starting. If banks give any indication on chart and option data then we can long banks or banknifty.

I have cross-checked the chart of these three banks and each bank has made a bullish pattern on the daily chart as mentioned below.

HDFCBANK:- Cup & Handle

SBIN:- Double Bottom

ICICI:- Inverted Head & Shoulder

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Disclaimer: The contents produced here are purely for educational purposes. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on the above write-up.

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