Banks -Sector technical watch :: HDFC Securities

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--> NSE Bank (Bank Nifty): The action of RBI has boosted the sentiments in favor of bulls. More upmove with new high
formations are likely for near term.

Current Observation:
 Daily timeframe: We observe an excellent upmove in banking sector during this week mainly due to the repo rate cut
by RBI, which has turned the negative sentiment of the sector to positive.
 Currently the banking sector has been witnessing upmoves, but the participation by the index participants (breadth)
is lacking in the last few sessions.
 New all time highs have been continued to form in banking sector as it formed yet another all time high of around
20167 levels on Friday.
 Daily momentum oscillator like 13 period MACD indicator is showing positive indication by cutting above its signal
line.
 Major sector participants like HDFC Bank, SBIN, ICICI Bank, Axis Bank and Yes Bank have moved up smartly to new
highs and have pushed the index to new highs. Other participants like Can Bank, Fed Bank, PNB, BOI Kotak Bank are
showing sideways consolidation with slight weak bias.
 Weekly Timeframe: Banking sector has witnessed an excellent upside breakout this week, after moving into sideways
consolidation for few weeks.
 The overhead hurdle of up sloping resistance line (brown line, which is connected from the previous swing high of
around 15742-mid of May 2014) and closed above it. This is positive indication for the underlying.
 We observe a formation of higher highs and higher lows and currently the index has made a new all time high of
around 20167 levels. Any upmove from here could be a possibility of the formation of new higher top.
 Weekly momentum oscillator like RSI has moved up to 76 levels, which is near the upper area of bullish range of 75-
80 levels.
Summing Up:
 The sharp upmove of broader market this week was inline with the major contribution by the Banking sector. The
underlying short and near term trend of Banking sector is positive and only concern is lack of breadth (smaller
number of issues of the sector participating during all time high formations).
 A next upside level to be watched is around 20500 and next 20890 (1.382% and 1.618% projection from L/H/L as
per daily timeframe) for the next couple of weeks. Immediate support is placed around 19750 levels.
 One may look to buy banking major and large cap stocks (except banking mid cap and PSU Banking) for reasonable
upside gains.

LINK

http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010914