Bank index likely to outperform Nifty, test 26,300 soon

Mumbai: The spot Bank Nifty, which has risen 9.5 per cent in four sessions through 24,524 on Friday, could next test the 26,311.30 level, the 61.8 per cent retracement of the correction from the record high of 32,613 in December through the low of 16,116 in March. Any dips will be a buying opportunity, said analysts.Consistently lagging the Nifty, which has bounced back over 50 per cent from its March low of 7,511, the banking index is now trying to “catch up”, says Rohit Srivastava, founder, IndiaCharts. For much of the past weeks, the Bank Nifty tried unsuccessfully to surpass the 38.2 per cent Fibonacci retracement of 22,418. “Finally, it broke out of that on August 24 and is in a momentum of its own,” said Srivastava.“The index could outperform the Nifty for now and test the 26,300 mark over the next few sessions,” said Rajesh Palviya of Axis Securities.Indeed, the September 24 expiry Bank Nifty options show the value of the 24,500 straddle -call and put- at 26,300. FIIs have invested 46,602 crore so far in August, the highest since October 2010. They are also over 70,000 contracts net long in Nifty and Bank Nifty futures.The put-call ratio of the September 3 expiry Bank Nifty options rose to 1.58 Friday from 1.13 a day earlier, a bullish sign.

from Economic Times https://ift.tt/3jutMtM