Nifty Bank outlook: Buy the dips; ICICI Bank, Axis Bank may outperform index

Nifty Bank made a high of 45,184.30 on the weekly chart, before ending the last week at 44,819.30, down 0.24 per cent.  On the weekly chart, the banking index formed a Doji candle with a minor difference of 139.35 points between the opening and closing values for the week.

A Doji suggests market indecision, but the overall trend is optimistic. One can expect the index to rise in next few weeks. At present, the RSI momentum indicator is trading around 65 levels. If the index rises, we expect ICICI Bank to outperform the Nifty Bank index, as it has closed at all-time high levels. Axis Bank may also be a front-runner in private banking. While PSU banks SBI and Bank of Baroda are expected to give healthy gains this week.

The Nifty Bank July futures are trading at an 83.35-point premium to the Nifty Bank spot.

The Nifty Bank Put option open interest (OI) distribution shows that the 44,500 strike has the biggest concentration, which may act as a support for the current expiry. The Nifty Bank Call strikes of 45,000 and 45,200 saw substantial OI concentrations and may serve as a resistance for the current expiry.

A Nifty Bank breakout above the 45,200 level should push the Nifty Bank towards all-time high levels of 45,655.50. A strong support is located at 44,300-44,500 levels; if the index closes below the mentioned support range, the momentum will shift to downside. It is recommended that traders should buy the dips in Nifty Bank with proper stop loss below the support mentioned.

Also read: Hot stocks on July 17, 2023: Adani Enterprises, Yes Bank, Subex, Mazagon Dock, others

Also read: LTIMindtree, HDFC Bank, Tata Elxsi shares mixed ahead of Q1 results. Analyst views