Nifty Bank crashes 8%; here's what technicals suggest now
As some analysts believe, banking sector will move in the bearish territory, banking index witnessed a steepest drag since the Covid-led mayhem. The crash has been more pervasive in the PSU banking sector pack.
Amid cautious sentiment as the polling outcome shows wide divergence from the exit polls, Bank Nifty index at the day’s low slumped 9.5 per cent to day's low at 46,138.35, its highest intraday fall after May 18, 2020. Nevertheless, at the close it recouped some of the losses and ended 7.95 per cent lower at 46,928.6 points.
Meanwhile, at the last count, Bank Nifty traded lower by 5.65 per cent at 48,100.3 points.
Of the 12 stocks constituting the index, all the stocks traded with sharp cuts of between 1-14 per cent, with counters like Bank of Baroda, Punjab National Bank and SBI were down by up to 15 per cent.
Previously, Bank Nifty hit a milestone and crossed the crucial 50,000 level for the first after exit polls suggested Modi’s return to power for the third-straight term.
After strong gains yesterday, Bank Nifty ended at 50979.95.
Sushil Kedia, Founder-Kedianomics believes that today's fall shows that the banking stocks come in the bearish territory henceforth.
What technicals indicate for Bank Nifty?
Jigar S. Patel, Sr. Manager - Equity Research-AnandRathi told ZeeBiz that Bank Nifty has reversed from a bearish deep crab pattern after reaching record levels of 51,133, which also marked the reversal zone for this pattern. This pattern indicates a significant shift in the trend, signalling a potential downward movement. However, Bank Nifty may take a short-term support around 46,800. This support level is crucial for the index as it provides a base from which it can potentially rebound.
On the upside, resistance is anticipated near the 48,800 mark. Given this technical setup, it is likely that Bank Nifty could experience a bounce back from the 46,800-47,200 zone, potentially reaching up to 48,800 in the next 3-4 trading sessions. This expected movement suggests a short-term trading opportunity for investors looking to capitalize on the rebound within this range, he added.
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