Nifty PSU Bank: A tough road ahead?
5paisa Research Team
Last Updated: 23rd April 2022 - 05:55 pm
This week, Nifty PSU Bank formed a bearish candle on the weekly timeframe and lost about 44.45 points or 1.51%.
During the week, most of the PSU Banks fell about 3-4% and induced weakness in the index. However, the heavyweight of the index SBIN had relatively outperformed the other banks and thus, saved the index’s blushes.
Since the recent swing low of 2429, the index has recovered sharply and had gained about 22% in just four weeks. However, the rally seems to have fizzled out as it faced strong resistance at the level of 3000. The index nearly tested the level of 3000 twice before plummeting about 4.5%. However, index saw a slight bounce back from the level of 2850 and indicates good support. On Wednesday, it formed a bearish candle and closed at day’s low. Despite the weakness, the index still trades above its key short term and long term moving averages.
A fall below this week’s low of 2850 shall confirm the downtrend. The support at lower levels has found to be at 2800 and 2760. A fall below 2760 can be met with an aggravated sell-off and see the level of 2630 which is its 200-DMA. However, on the upside, 3000-level will remain a major hurdle to pass through. The index can see another leg of rally if it takes out this level and can see the level of 3050 and 3080. However, considering its recent price action, the chances are less. The technical parameters indicate neutrally in the index and do not show positive sentiment.
In a long term, if the government divestments in some banks go as per plan, it can bring positive sentiment. Moreover, with the corporate results kicking in, the index is likely to be volatile in upcoming days.
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