Q2 Impact: SBI, BoB may see another 25% upside, UCO Bank 50%, hint charts

SBI hit life-time high, while Bank of Baroda registered a new 52-week high in trades on Monday after the banks reported strong Q2 earnings over the weekend. Here's what the charts indicate ahead.

In the recent past, the The PSU Bank index began to outperform the benchmark indices, backed by strong Q2 earnings by the enlisted state-run banks. On Monday, the Nifty PSU Bank index recorded a new historic peak at 3,731, up 5.50 per cent. The index has surged 47 per cent so far in this calendar year. 

In comparison, the domestic benchmark indices, the BSE Sensex and Nifty 50 are yet to claim their respective historic peaks, and were seen trading shy by 2 -2.50 per cent. Both the key indices have rallied 19.50 per cent from their respective 52-week lows touched in June 2022, while PSU Bank index has zoomed as much as 62 per cent.

Speculative traders who took bets on State Bank of India (SBI), Bank of Baroda (BoB) and UCO Bank last week on hopes of higher- than-expected earnings for the  July-September quarter, were rewarded handsomely this morning. SBI opened gap-up and hit an all-time high at Rs 622.70, logging 4.80 per cent jump fllowing the 5 per cent rally last week, Bank of Baroda soared 10 per cent, and also registered a fresh 52-week high. UCO Bank extended last week's 15 per cent rally, with a 3 per cent gain.

State Bank of India, India’s largest lender on Saturday 05, reported its highest-ever quarterly profit at Rs 13,265 crore, up 74 per cent compared to Rs 7,626 in the corresponding quarter a year ago, beating Street estimates.  In addition, the bank reported 13 per cent rise in the net interest margin (NIM) to Rs 35,183 for the September quarter. READ MORE

Bank Of Baroda, too, beat Street estimates by posting 58 per cent rise in net profit at Rs 3,313 crore for the quarter ended September. UCO Bank delivered more-than-double net profit of Rs 505 crore as against Rs 204.4 crore a yeag ago.  

Going ahead, here’s what the charts indicate for these three PSU bank stocks:-

State Bank of India (SBIN) 

Likely target: Rs 750

Upside potential:  22%

The stock was struggling to cross the Rs 550-level since January this year, which it eventually overcame in August 2022. Pst which, the stock has witnessed added strength and a buoyant momentum empowered it to scale uncharted territory without much hustle.

The current trend, indicates an upside towards Rs 750 level for the stock. The immediate support stands at Rs 590 and thereafter at Rs 550, shows the daily chart. Despite a negative divergence on the charts, the price action is not exhibiting any sluggishness. In fact, the momentum is so strong, that the stock is seen absorbing selling pressure on every step forward. CLICK HERE FOR THE CHART

Bank of Baroda (BANKBARODA)

Likely target: Rs 200

Upside potential:  25%

Shares of Bank of Baroda have almost doubled since the start of the year gaining 98 per cent. The momentum has been resilient with added strength amid the optimistic sentiment on every new peak scaled. The stock on Monday hit a fresh 52-week high of Rs 161.60, with a clear intend to rally further. The base formation close to Rs 120 prompted fresh breakout, pushing the support base to Rs 140 level, with the price action denoting Rs 200 as the immediate reach. CLICK HERE FOR THE CHART

UCO Bank (UCOBANK)

Likely target: Rs 23

Upside potential:  50% 

The Inverse Head and Shoulder breakout has helped the stock navigate over the 200-weekly moving average (WMA), a feat that the stock was not able to accomplish since 2015. This move is accompanied by the Moving Average Convergence Divergence (MACD) leaping over the zero line indicating a positive momentum, according to the weekly chart. The stock brokeout on massive volumes pointing towards a rally to Rs 23, the hurdle that the stock has failed to cross since 2018. The support cushion for the stock is at Rs 12. CLICK HERE FOR THE CHART