Indian stock markets started new year on an emphatic note on Monday, carrying on from the gains of the last trading session on Friday. The BSE Sensex was trading at 59,124.85, up almost 871 points or 1.50 per cent around 2:15 pm on Monday. Meanwhile, the broader market Nifty50 was trading at 17,614.80. up 260 points or 1.5 per cent from the last closing price. 

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Of the 15 sectoral indices, 13 were trading in the green around this time while the remaining 2 were trading in the red. Banking stocks were in focus today with Nifty Bank, Nifty Financial Services, Nifty Private Bank and Nifty PSU Bank among the biggest gainers. Nifty Bank was up 2.4 per cent, while Nifty PSU Bank was up 2.3 per cent in the intraday trade. 

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Technical Analyst Nilesh Jain opines that the PSU Bank stocks are up for a major rally from here. Nifty PSU bank was trading at 2588.45 around this time. All 13 stocks in this index were trading positively with Punjab & Sind Bank (PSB) as the biggest gainer. It was up over 3 per cent followed by Canara Bank and Bank of India. Both the stocks gained 2.9 per cent and 2.3 per cent from the Friday closing price.  

Jain, who is Assistant Vice President (AVP), Equity Research Technical and Derivatives at Centrum Broking said that the index has taken support at 2430 in the December series and is now showing signs of bottoming out. It is seeing a breakout from the sideways consolidation, today, the AVP said. A mover between 2700 and 2800 is seen from the current levels.  

The rally in this index will be led by certain stocks and the largest public sector bank State Bank of India (SBI) is likely to take a lead, he added. It will be aided by stocks including Canara Bank and Bank of Baroda. The three stocks are also his top recommendations in this segment. 

SBI: Buy| LTP: Rs 471| Target: Rs 500-540| Stop Loss: Rs 440| Upside 15% 

Jain is bullish on this stock and recommends a buy. He said that the stock has corrected significantly from the highs of Rs 542 and is expected to test it again. He gives two targets at RS 500 and Rs 540. 

Canara Bank: Buy| LTP: Rs 205| Target: Rs 225-240| Stop Loss: Rs 186| Upside 17% 

This stock can be bought at current levels despite today’s gains, Jain said. It has a similar setup like its other PSU bank peers where a correction was seen after a strong rally. Base formation has already happened and Canara Bank stocks are now poised for an upside. It is taken support at the 200-day moving average and is now showing trend reversal.   

BoB: Buy| LTP: Rs 83| Target: Rs 90-95| Stop Loss: Rs 77| Upside 14% 

This is another stock on which Jain is bullish. The Bank of Baroda shares have seen a breakout from the 200-DMA today and looks good for an upside. It has taken multiple supports at levels around 77, which should also be treated as its stop loss.  

It was up over 2 per cent today around the time of recommendation.

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)