Auto, Bank, Realty: Trading strategies in rate sensitive post RBI policy

The Nifty Bank, Nifty PSU Bank indices are likely to extend the pullback in the near-term; Auto index too seems favourably placed, while the Realty index remains on weak ground, shows technical charts

The Reserve Bank of India (RBI) appointed the Monetary Policy Committee (MPC) in their fifth bi-monthly review in the calendar year 2024 decided to keep the repo rate unchanged at 6.5 per cent. Speaking on the occasion, the RBI governor Shaktikanta Das said, the MPC Committee, along with the 3 new external members, voted in favour of keeping rates untouched.

Further, the RBI governor said the policy stance was 'Neutral' and the MPC to remain unambiguously focussed on a durable alignment of inflation with its target while supporting growth.

Post the RBI policy, the NSE Nifty 50 index surged more than 200 points to 25,200 levels, and the BSE Sensex was up more than 550 points at 82,200 levels. Among rate-sensitive indices -  the Nifty PSU Bank index rallied 1.5 per cent; while the Bank Nifty and Nifty Auto jumped over 1 per cent each. The Nifty Realty index soared 2.4 per cent.

 

  

Here's a technical outlook on key rate sensitive indices:

Bank Nifty

Current Level: 51,400

Upside Potential: 3.3%

Support: 51,187

Resistance: 52,560

Prior to today, the Bank Nifty had closed below its 100-DMA (Daily Moving Average) for two consecutive trading sessions following the near 8 per cent fall from its record high of 54,467. Today, the Bank Nifty is seen attempting to conquer the 100-DMA hurdle which stands at 51,187; above which near resistance is seen at 51,545 levels in the form of 50-DMA.

The Bank Nifty will need to break and close consistently above the 50-DMA for the recovery to continue. On its way up the index can bounce back to 53,100 levels, with interim resistance seen at 52,560. CLICK HERE FOR THE CHART 

Nifty PSU Bank

Current Level: 6,682

Upside Potential: 6.1%

Support: 6,380

Resistance: 6,900

The Nifty PSU Bank index has been on a downward trajectory since the breakdown in early June. The index quotes near about 20 per cent lower when compared to its peak of 8,053 hit on June 03. Technically, a decline in excess of 20 per cent from the high is also considered as a sign of a bear market.

The Nifty PSU Bank index has been consistently trading below the key moving averages since August. The medium-term chart shows presence of key support at 6,380 levels. As long as this support is protected, the Nifty PSU Bank index may attempt a bounce. The upside for the index is likely to be capped around 7,086 levels; with interim resistance seen at 6,900 levels. CLICK HERE FOR THE CHART

Nifty Auto

Current Level: 26,500

Upside Potential: 4.2%

Support: 26,365; 25,635

Resistance: 27,300

Amid today's 1 per cent gain, the Nifty Auto index has bounced back above its 20-DMA. The near-term bias is likely to remain upbeat as long as the index holds above 26,365 levels. On the upside, the index may soon test 27,630; with some resistance seen at 27,300 levels. The overall bias is likely to remain positive as long as the index holds above the 20-WMA at 25,635. CLICK HERE FOR THE CHART

Nifty Realty

Current Level: 1,054

Downside Risk: 10.8%

Support: 1,000

Resistance: 1,074; 1,106

The overall bias for the Nifty Realty index seems negative based on the present chart structure. The index is not only trading below the key moving averages, but has also given a downward breakout on the super trend line. 

For now, the upside for the Nifty Realty index seems capped at 1,106; with interim resistance likely around 1,074. The index seems on course to test the 200-DMA support at 975 levels, below which a fall to 940 seems likely. Interim support can be expected around 1,000-mark. CLICK HERE FOR THE CHART