Bank of Baroda, SBI: How to trade rate-sensitive stocks post RBI policy

Stocks like SBI and Bank of Baroda can expect a surge of over 5 per cent in coming sessions.

Rate-sensitive stocks, from sectors like banks, financials, automobiles and real estate, were in focus at the bourses on Wednesday after the Reserve Bank of India kept key policy rates unchanged amid rising Covid-19 cases. Repo rate and the reverse repo rate remain unchanged at 4 per cent and 3.35 per cent.

At 10:52 am, Nifty PSU Bank, Nifty Auto and Nifty Realty indices were trading higher in the range of 1 per cent to 1.5 per cent on the NSE. Nifty Bank and Nifty Private Bank indices up 0.5 per cent each, as compared to 0.65 per cent rise in the Nifty50 index.

 "The stance of the monetary policy will remain accommodative till the prospects of economic recovery are not sustained," the RBI governor said, at a virtual press conference in Mumbai, after a three-day meeting of the regulator’s monetary policy committee. READ MORE

Here's a look at how select rate-sensitive counters look on charts:

BANKNIFTY
 
Likely target: 33,150 - 33,800

Upside potential: 1.22 - 3.21

The index is currently hovering around 100-day moving average (DMA), placed at 32,554 levels. The immediate resistance stays at 34,549 mark. On technical parameters, until the Relative Strength Index (RSI) does not cross 50 value, which is the immediate resistance, the index may not receive expected strength, as per the daily chart. The immediate support comes at 32,000 levels. The reversal around 100-DMA may see a rally towards 33,150 and 33,800 levels. CLICK HERE FOR THE CHART
 
 
State Bank of India (SBIN)

Likely target: Rs 390 - RS 400 (after conquering Rs 357)

Upside potential: 4% - 6.67%

The current momentum is indicating a negative bias with the Moving Average Convergence Divergence (MACD) falling below the zero line. The counter is trading below the support of 50-day moving average (DMA), placed at Rs 369.60 levels. The immediate support comes at Rs 318, which is its 100-DMA. To breakout on the upside, the counter needs to scale above Rs 375 to rally towards Rs 390 and RS 400 levels. CLICK HERE FOR THE CHART
 
HDFC Bank Limited (HDFCBANK)

Likely target: Rs 1,526 - Rs 1550

Upside potential: 3.74% - 5.37%

As the counter failed to successfully conquer the 50-DMA, the selling pressure and weakness led to the breach of the support of 100-DMA, currently placed at Rs 1,471 levels. The short-term trend for the stock looks weak, although, until the counter trades above the crucial support of Rs 1,325 levels, the upside bias is going to survive. The upward trend may revive, if the counter manages to close over the 100-DMA. This may push stock price to higher levels of Rs 1,526 and Rs 1550. CLICK HERE FOR THE CHART
 
Bank of Baroda (BANKBARODA)

Likely target: Rs 78.50 and Rs 81

Upside potential:  5.08% - 8.29%

The counter shows a reversal near 100-DMA, currently placed at Rs 69.75 levels. This move is supported by a “double bottom” formation of the RSI, as per the daily chart. Thus, until the counter holds the stock above the RSI support of the 40 value, the counter is expected to rise in the direction of Rs 78.50 and Rs 81 levels. CLICK HERE FOR THE CHART
 
ICICI Bank Ltd (ICICIBANK)

Likely target: Rs 590

Upside potential:  2.79%

The recent weakness has seen the counter retesting the support near the gap-up range of Rs 551- 545 levels. Until this range is held, the upside reversal may see strong support of RSI, which is resilient to breach of 40 value, as per the daily chart. The reversal may see Rs 590 as the immediate levels. CLICK HERE FOR THE CHART