HDFC Bank, Bharat Forge: How to trade auto, bank stocks in current market

Although Nifty Auto shows tremendous optimism, Nifty Bank may see profit-booking at crucial levels going ahead.

Auto and banking stocks traded with healthy gains on Thursday. Nifty Auto index jumped over 5 per cent, while the Nifty Bank rallied nearly 4 per cent in intra-day trade. 

Here's a look at what technical charts indicate for the two indices and their key constituents.

NIFTY AUTO : With a strong formation of a 'Double Bottom' on the daily chart, the index has managed to strongly bounce back. Going ahead, the index can even gain ground around 5,200 levels, thus establishing a strong buying base. Further, as it crosses 5,700 levels, which is its immediate resistance, a decent rally may further push the index towards 6,100 and then 6,300 levels. CLICK HERE FOR THE CHART

Bharat Forge Ltd (BHARATFORG): The formation on the daily chart shows “Inverse Head and Shoulder” with a breakout at Rs 300 levels. The Relative Strength Index (RSI) has come out of oversold condition, further boosting the upside sentiment. This suggests a positive bias which may see Rs 350 as an immediate level in the coming sessions. The support remains at Rs 277 levels. CLICK HERE FOR THE CHART

Bajaj Auto Ltd (BAJAJ-AUTO): A Cup and Handle formation has broken out on upside, indicating Rs 2,800 as short term levels. On the downside, the support remains at Rs 2,430 and Rs 2,520 levels. The Moving Average Convergence Divergence (MACD) has crossed the zero line upward inducing a positive strength that can drive prices upward aggressively. CLICK HERE FOR THE CHART
 
Exide Industries Ltd (EXIDEIND): An ascending triangle pattern or a consolidation has given an upside breakout. This rally may move towards Rs 171 in the coming sessions. The support remains at Rs 155 and Rs 140 levels. The outlook for short term trading looks positively driven. CLICK HERE FOR THE CHART

NIFTY BANK: The index is nearing the 38.20% Fibonacci retracement placed at 22,050 and may see some profit-booking the same way the benchmark indices showed few sessions ago. The overall trend looks optimistic; however profit-booking is highly recommended as per the daily chart. One can expect further upside when the profit-booking phase is done. The major support now stands at 20,000 levels with immediate support at 20,900. CLICK HERE FOR THE CHART

HDFC Bank Ltd (HDFCBANK): The counter is the perfect example of “Ascending Triangle” breakout. As the counter rises above Rs 990 levels, short covering is expected to push prices towards Rs 1,080 and Rs 1,120 levels in the coming sessions. The support remains at Rs 950 and only a breach of Rs 900 may drag this counter in bearish sentiment. Till then, the counter is building optimistic view and the upside momentum should prevail for another one to two weeks. CLICK HERE FOR THE CHART

Federal Bank Ltd (FEDERALBNK): Today, the counter has managed to absorb selling pressure emerging in the range of Rs 48 to Rs 50 levels. This move has assisted counter to surge towards the next resistance level of Rs 55 level. The support remains at Rs 45. The trend is positive and upside bias should stay strong. CLICK HERE FOR THE CHART
 
ICICI Bank Ltd (ICICIBANK): A closing basis formation of “Double Bottom” has given a breakout suggesting counter to witness upside towards Rs 420 in the coming sessions. The support remains at Rs 360 levels. CLICK HERE FOR THE CHART