Nifty Bank at 5-month high; may lead next leg of the mkt rally, charts show

A breakout in Nifty Bank index may trigger an upside of up to 15% in bank stocks. Here are the key levels one needs to keep a tab on for frontline bank stocks

NIFTYBANK
Likely target: 37,000 and above 37,708
Upside potential:   1.30% to 3.30%
 
In the past few months, the Nifty Bank Index has consistently struggled to rise above the 36,000 mark. A move above the 36,497 levels, which is the five-month high for the index, can take it up further. The daily and weekly charts suggest that a breakout above the above-mentioned level can see the index hit 37,000 mark and then record a new all-time high by crossing 37,708 levels.  

As long as the support of 35,750 is defended on a closing basis, the upside sentiment is likely to see more interest of market participants in bank stocks. One can easily expect 10 -15 per cent jump in the index within a short time. CLICK HERE FOR THE CHART

A quick analysis of the constituients of the index suggests that there is more headroom among most stocks. Among the lot, Punjab National Bank (PNB), Feberal Bank and IDFC First Bank can move up over 20 per cent each from the current levels, charts suggest. (See table below).

ICII Bank, Bandhan Bank, State Bank of India (SBI), HDFC Bank and Axis Bank are likely to move up between 10 per cent - 15 per cent going ahead, provided the overall market momentum stays strong. There is a strong chance that the next leg of the market rally could even be led by banking stocks.

Bank stocks