Nifty Bank hit a high of 43,515.05 on the weekly chart and finally ended the week at 43,103.75, up 0.28 per cent from its previous week’s closing level.
On the weekly chart, the banking index remains above the 21-DMA, which may continue to act as an important support for the index. Both the MACD and RSI momentum indicators are currently in the positive zone. We expect ICICI Bank and HDFC Bank to be leaders among private banks. While PSU banks like Bank of Baroda, Canara Bank and SEBI are solid and may make respectable gains in the coming week.
Nifty Bank December futures are trading at a premium of 217.05 points. The highest Put option open interest (OI) concentration at the strike of 43,000 may provide support for the current expiry. Significant OI concentration seen near 43,500 Nifty Bank calls, which may act as a barrier for current expiry.
Nifty Bank has seen aggressive long rollover from the previous series till December series. This indicates that the traders who had earlier taken a bullish stance, have maintained it and are placing their bets in the next month’s contract as well.
Nifty Bank is in a positive rising channel with a higher high-higher low pattern.
A strong support is located in the 42,300-42,500 areas. If the index falls below these levels, the sentiment will be highly skewed. Traders and investors can continue to book small profits with trailing stop loss.
(The author of this article is Executive Director, Choice Broking)
