SBI, ICICI Bank: Are financial sector stocks a good bet post RBI measures?

How should you trade the financial sector stocks after the RBI's liquidity measures? Are the banking stocks likely to gain ground in the days ahead? Here is what the charts suggest.

The Reserve Bank of India (RBI) unveiled a host of measures to ensure adequate liquidity in the system and ease the financial stress caused due to coronavirus (Covid-19) crisis. The central bank reduced the reverse repo rate by 25 basis points to 3.75 per cent and extended benefits to the banking and the non-bank finance companies. READ ABOUT IT HERE

So, how should you trade the financial sector stocks? Are the banking stocks likely to gain ground in the days ahead? Here is what the charts suggest.

NIFTY BANK:  From a very short-term viewpoint, the index has formed a symmetrical triangle formation, which has a shortfall in volumes, as per the daily chart. The price is showing breakout, but is unable to hold the upside momentum. If the price moves up, the rally needs to conquer the selling pressure existing in the range of 21,000 to 22,000 levels. The overall outlook remains positive, but with cautious view. One can see a major breakdown below 18,000 levels if the support of 18,600 gets violated on strong volumes. CLICK HERE FOR THE CHART

NIFTY PSU BANK: If anyone wants to look for opportunities in this index, then they should wait for 1,620 levels. Although, the current scenario may see the index move up a bit, the overall set up indicates weakness ahead. Any break below 1,200 levels may lead to extreme sell-off that take the index below 1,000.  CLICK HERE FOR THE CHART

Axis Bank Ltd (AXISBANK):  The daily chart shows “Higher high, higher low formation”. This stock need to overcome selling pressure emerging till Rs 480 levels. A strong close above this level may induce further positive strength. Else, a correction may emerge with support standing at Rs 400 and Rs 365 levels. The overall trend looks bearish, as there can be selling pressure at higher levels. CLICK HERE FOR THE CHART

State Bank of India (SBIN): The counter is trading in a consolidation phase in the range of Rs 205 to Rs Rs 175. Although, Relative Strength Index (RSI) has moved above the oversold condition, the price is not showing any optimism. The volumes have remained sluggish - a sign of a concern for bullish bets. CLICK HERE FOR THE CHART

HDFC Bank Ltd (HDFCBANK): This counter has a strong resistance in the range of Rs 950 to Rs 1000 levels. Unless this resistance is not conquered, the upside is capped. The lower side support remains at Rs 850 and Rs 810 levels and the outlook remains cautious till major resistances are not achieved. CLICK HERE FOR THE CHART
               
ICICI Bank Ltd (ICICIBANK): The counter is managing to absorb the selling pressure around Rs 355 levels. A major breakout is likely to happen above Rs 370 levels. Support remains at Rs 320. The overall trend remains positive and till the stock trades above Rs 340 levels, the bullish sentiment should prevail. CLICK HERE FOR THE CHART

Bank of Baroda (BANKBARODA): The trend remains bearish as the counter does not show any major reversal, as per daily chart. That’s said, the range of Rs 45 to Rs 46 remains the support. Only a breach may lead to further sell-off, turning the overall sentiment to “avoid”. On the other hand, the immediate resistance comes at Rs 55 and upside breakout is located at Rs 61 levels. CLICK HERE FOR THE CHART