Banking stocks look positive

Published November 6, 2018

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The market showed a small loss Monday, and Nifty 50 (NIFTY) ended the day at 10524 points, which is a decline of 0.27 per cent.

713 shares were up and 782 were down, while 59 remained unchanged. There was no trading in 251 shares.

The total value of the trading volume for shares and primary capital certificates Monday was approximately 292.4 billion.

Nifty Bank (BANKNIFTY.NS) Close: 25 732.00

Bank Nifty was the star performer among all the indices on NSE with Nifty PSU Bank index rising around 2.90 per cent on Monday.
The index is still inside an uptrend channel, unlike Nifty 50. It marginally broke above its resistance at 25700 points and also gave a breakout from a small double double bottom formation. This is a positive sign. However, there is still a long way to go as the next level of resistance is shown at 27500 points or a little less than 7 per cent from yesterday's close. Support is around 24400 points in BankNifty.
Investtech's outlook (one to six months): Positive

Axis Bank Limited (AXISBANK.NS) Close: 624.40

Since our last published analysis of AXISBANK on the 17th of October, the stock has gained over 12 per cent.
AXISBANK rose over two per cent on Monday on very high volumes.
The stock is looking strong in a rising trend channel in the medium term. It broke through its earlier resistance of 620.00 rupees to close at 624.40 rupees. Next resistance is nowhere before 660.00 which is its last pivot point. On the downside there is support around 590.00 levels.
The volume balance indicator is positive and suggests that more investors are buying in the the stock at steadily higher prices while sellers are not willing to sell at lower prices. The momentum indicator RSI is also positive and rising, which supports the price rise.
Investtech's outlook (one to six months): Positive

Oriental Bank of Comme (ORIENTBANK.NS) Close: 82.05

Another interesting-looking banking stock is Orient Bank of Commerce. The stock is out of its downward trend channel and is just 3.6 % shy of giving a buy signal. It is trading under its resistance of 85.00 rupees. A close above this level may initiate a buy signal in the stock.
Volume balance is positive as indicated by green up arrows on the bottom right corner of the chart, indicating that buyers are getting aggressive while sellers are passive. This is a sign of strength. RSI above 70 shows that the stock has strong positive momentum in the short term.
The stock has short term support around 76.70.
Investtech's outlook (one to six months): Watch

Other interesting-looking banking stocks that are very close to their short term resistance levels and have very positive volume balance, and thus can turn out to be good bets in the near term if they manage to close above their resistance levels, are SOUTHBANK, UNIONBANK, FEDERALBANK and SYNDIBANK.

The analyses are based on closing price as per November 5, 2018. Maintaining proper stop loss is always recommended.