PSU Banks: Out of the woods

We have seen a clear distinct price differences between private and state owned banks. Bank Nifty is trading 4% above the 2015 high while Nifty PSU Bank Index is almost 20% lower than the high registered at same time. It is evident that out performance of Bank Nifty is due to phenomenal run of some private banks. 

This could be the time for PSU Banks to cover some of the lost ground. Chart of Nifty PSU Bank Index is suggesting that there could be some fireworks. Obviously that will come on valid breakout.

We will discuss current technical scenario of Nifty PSU Bank and some state owned banks. Nifty PSU Bank is now trading near to its breakout level 3600. Close above 3600 on weekly basis, if it happens, will occur after May 2015. Valid breakout may take PSU Banks much higher and there could be out performance of these banks comparing to private ones. 

According to theory, no formation, be it bullish or bearish, does not get complete until and unless valid breakout happens. 

Among individual banks, charts of State Bank of India, (SBI), Punjab National Bank (PNB) and Canara Bank are worth noticing. Please find the charts below,

292 is the level to watch for. Weekly close above this level will be considered bullish. Similarly, the level of 322 is important for Canara Bank. 

Technical evidences of PNB is slightly different. Here we have 165-170 supply zone. If PNB manages to close above this level on weekly basis, we can expect some fireworks.

All the stock discussed above are potential breakout candidate. We will keep the stocks in watch-list.

Disclaimer - The views here expressed and the charts shared are strictly for educational purpose and not guideline for buy or sell. The author will not be responsible for any loss, that may occur.