Bank Nifty index has been under profit-booking trigger after scaling to life-time high of 44,498.60 on 16th June 2023. However, the banking index witnessed heavy profit booking in frontline stocks like State Bank of India (SBI), ICICI Bank, Kotak Mahindra Bank, Axis Bank and some other banking majors. In fact, after climbing to record high of 44,498 mark, Bank Nifty has slipped down towards 43,622 levels, logging near 2 per cent dip from its all-time highs and the index is facing tough hurdle at 44,000 to 44,100 levels. So, it becomes important to know whether banking stocks have topped out or they are taking a pause to prepare for a fresh leg of rally after this profit booking trigger as Nifty is yet to climb to a new peak.
Speaking on outlook for Bank Nifty, Aamar Deo Singh, Head Advisory at Angel One said, "Overall we are witnessing cooling-off in banking stocks post the spectacular rally witnessed across the board in the banking space. This week we saw heavyweights such as ICICI Bank, Kotak Mahindra Bank, SBI amongst others, display weakness on the back off unwinding of positions and also profit booking at higher levels. Going forward, we could witness consolidation in the banking space, with the broader range for Nifty Bank seen between 42,700 to 44,500 in the short-term."
On pivot levels to ascertain bullish or bearish trend in banking sector, Vashali Parekh, Vice President — Technical Research at Prabhudas Lilladher said, "For Bank Nifty index, the level of 43,000 remain as the strong support while 44,400 would be strong resistance barrier which needs to be breached decisively for fresh breakout."
Prabhudas Lilladher said that till Bank Nifty index is in current range, it would be difficult to say whether banking stocks have topped out or it is taking a breather after a long bull run. However, she also said that there can be more downside possibility if the index breaches 43,000 on closing basis. Vaishali Parekh went on to add that fresh rally in banking stocks can be ascertained only when Bank Nifty index breaches 44,500 hurdle on a closing basis.
Bank stocks to watch next week
On banking stocks that may play a key role in fresh rally on Bank Nifty index, Saurabh Jain, Vice President — Research at SMC Global Securities said, "In private sector banks, ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank may bounce back after the current profit booking trigger. In public sector bank, Bank of Baroda, State Bank of India, Punjab National Bank is expected to give better returns in medium to long term."
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 24 Jun 2023, 02:47 PM IST
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