SBI, BoB, BoI: How to trade PSU Bank stocks as index falls 20% from peak

The Nifty PSU Bank index has plunged over 20% in the last six months and now seen testing long-term support on the monthly chart. Will PSU Banks rebound or extend fall? Key levels to watch out for.

The Nifty PSU Bank index has declined over 20 per cent from its peak of 8,053 in June 2024 in little over six months. In the process, the several PSU Bank stocks have declined in the range of 20-30 per cent, and are now seen testing the key long-term moving averages on the monthly scale.  In stock markets, a fall of more than 20 per cent from the peak is considered as a change in stance from bullish to bearish. On Tuesday, the Nifty PSU Bank index quoted with a gain of 0.7 per cent around 6,430 levels.  Given this background, can PSU Bank stocks reclaim lost territory or is further pain on cards. Here's what the technical charts hint.  Nifty PSU Bank  Current Level: 6,434  Upside Potential: 13.8%  Downside Risk: 9.9%  Support: 6,287; 6,219  Resistance: 6,700; 6,800; 6,950; 7,180  At current levels, the Nifty PSU Bank index is seen trading in oversold territory below the key moving averages on the daily scale. The weekly chart shows presence of near support at 6,287 followed by the all-important 20-MMA (Monthly Moving Average) support at 6,219. The Nifty PSU Bank index has sustained above its 20-MMA for the last four years. As long as these support levels are protected the index can potentially attempt a bounce back in the near-term. CLICK HERE FOR THE CHART  However, in case, the support area is violated the Nifty PSU Bank index could extend the fall and test levels of 5,800 - around the 100-WMA (Weekly Moving Average). On the upside, the index will need to trade consistently above 6,700 levels for a likely turnaround. As such, the Nifty PSU Bank index can pullback to 7,320 levels with intermediate resistance seen at 6,800, 6,950 and 7,170 levels.   SBI  Current Price: Rs 780  Upside Potential: 12.8%  Downside Risk: 7.7%  Support: Rs 765; Rs 740  Resistance: Rs 830  SBI stock has declined nearly 11 per cent in the last one month and is now seen trading below the key moving averages on the daily scale. On the medium-term scale, the stock is seen consolidating in the Rs 765 - Rs 875 trading range. CLICK HERE FOR THE CHART  On the downside, the stock can potentially extend the fall to Rs 740 and Rs 720 levels; wherein stand the major supports. Whereas, on the upside, the stock needs to trade consistently above Rs 830 to regain strength and jump back to Rs 880 levels.  Bank of Baroda (BoB)  Current Price: Rs 231  Upside Potential: 12.5%  Downside Risk: 16.5%  Support: Rs 221; Rs 219  Resistance: Rs 233; Rs 245; Rs 253  The Bank of Baroda stock is seen testing its 20-MMA (Monthly Moving Average) for the first time in four years. The stock last traded below the same in January 2021 around Rs 117 levels. Post a breakdown then, the stock rallied over 148 per cent to hit a high of Rs 291.61 in June 2024. CLICK HERE FOR THE CHART  Presently, the 20-MMA stands at Rs 233, with almost the entire month remaining for trade. Meanwhile, on the weekly scale the stock is seen trading close to its super trend line support which stands at Rs 219 - a key momentum indicator the stock has not violated since January 2022; interim support for the stock also exists at Rs 221 in the form of the 100-WMA (Weekly Moving Average). On the flip side, break and sustained trade below the key support zone, can trigger a slide towards Rs 193.  ALSO READ: 7 hotel stocks with up to 15% upside potential as per charts  Thus, to sum it up, the stock has a presence of multiple long-term supports within its reach. As long as these supports are respected the Bank of Baroda stock can attempt a pullback in the near-term. As such, the stock will need to trade consistently above Rs 245 for a likely upside target of Rs 260. Interim resistance for the stock is seen at Rs 233 and Rs 253 levels.  Bank of India (BoI)  Current Price: Rs 100.10  Upside Potential: 19.9%  Downside Risk: 20.1%  Support: Rs 96.80  Resistance: Rs 107; Rs 111  Bank of India stock is seen repeatedly testing support around its 100-WMA for the last three months. The 100-WMA stands at Rs 105, below which near support for the stock exists at Rs 96.80. However, on the longer-term chart the stock is seen trading below its 20-MMA for the second straight month; which is likely to be a cause for concern. CLICK HERE FOR THE CHART  The long-term chart shows that Bank of India stock can drift lower to Rs 83.50 and Rs 80 levels in the coming months. On the upside, the stock is expected to face resistance around Rs 107 and Rs 111 levels; above which a spurt towards Rs 120 seems likely.   Canara Bank  Current Price: Rs 98.10  Upside Potential: 15%  Downside Risk: 22.3%  Support: Rs 96.55; Rs 93.80; Rs 89.50  Resistance: Rs 104.70; Rs 106.30; Rs 111  Canara Bank stock too is seen testing its 20-MMA support, which now stands at Rs 96.55, after a gap of almost 4 years. Break and sustained trade below the same can trigger a fall towards Rs 83.40; with intermediate support expected around Rs 93.80 and Rs 89.50 levels. CLICK HERE FOR THE CHART  On the upside, the stock will need to fight and break above the Rs 104.70 - Rs 106.30 resistance zone in order to attempt a pullback towards Rs 120, with some resistance again at Rs 111.    Indian Bank  Current Price: Rs 511  Upside Potential: 16.4%  Downside Risk: 13.1%  Support: Rs 486; Rs 473  Resistance: Rs 540; Rs 574  Indian Bank stock had witnessed a stupendous 679 per cent rally post its breakout above the 20-MMA in January 2021. The stock from levels of Rs 80 then, soared to a high of Rs 623 in June 2024. At present levels the stock has declined 24.8 per cent form its peak and is now seen trading within striking distance of its 20-MMA, which stands at Rs 486. CLICK HERE FOR THE CHART  The chart set-up on the daily and weekly scale is unfavourable; hence the stock may witness some downward pressure in the near-term and could test levels of Rs 473 - Rs 444 on the downside. The 20-WMA at Rs 540 is now on the verge of slipping below the 50-WMA; this development is technically considered weak for the stock.  On the other hand, the stock will need to break and trade consistently above Rs 540 in order to negate the negative set-up. On the upside the stock can potentially bounce back to Rs 595 levels with interim resistance seen at Rs 574.