
Nifty Bank formed a bullish candle with a long upper wick on the weekly chart. The banking settled last week at 44,231.45, after making a low of 43,862.00 levels. The index gained 0.87 per cent for the week. The RSI momentum indicator is currently trading at the 55 level.
On the daily chart, the index can see a strong support at the 43,600 level. If the aforementioned support level breaks, one can observe further bearishness in Nifty Bank. Private lenders such as HDFC Bank and Kotak Mahindra Bank may lead the index downwards. If the index moves on the higher side, one can expect Axis Bank to outperform Nifty Bank. In the PSU banking space, Pubjab National Bank (PNB) and State Bank of India (SBI) are expected to move higher and deliver decent gains this week.
The Nifty Bank August futures traded at a 61.45-point discount to the Nifty Bank spot.
The open interest (OI) distribution for Nifty Bank Put options shows that the 44,000-strike has the highest concentration, which may act as support for the current expiry. Nifty Bank Call strikes of 44,500 and 44,700 witnesses significant OI concentrations and may act as resistance for the current expiry.
On weekly charts, one can witness a smaller support in a range of 43,600-43,700 levels. If Nifty Bank falls below the mentioned levels, it can move towards the levels of 43,300.
Nifty Bank has strong resistance of 44,600, which is also close to its 50- and 20-day EMA levels. If Nifty Bank breaches the mentioned resistance, it can move higher towards 45,250.
(Bagadia is the Executive Director at Choice Broking)
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