RBI Policy impact: Nifty PSU Bank index, SBI can rally up to 12%; BoB 17%

The RBI left key rates - repo and reverse repo unmoved at 4 per cent and 3.35 per cent, respectively.

The Reserve Bank of India’s monetary policy committee (MPC) left key interest rates unchanged for the tenth straight time on Thursday, retaining an accommodative stance amid the threat surrounding Omicron coronavirus variant.

The repo and reverse repo rates remained unmoved at 4 per cent and 3.35 per cent, respectively, said RBI governor Shaktikanta Das in his policy statement. READ MORE

As a result of which, the markets which were wobbly in morning trade, firmed up led by gains in rate sensitive shares such as financials, including banks, NBFCs, auto and real-estate shares. READ MORE
 

Meanwhile, here's what a quick analysis of the Nifty PSU Bank index and select counters reveal:
 

NIFTY PSU BANKS (NIFTYPSUBA)

Likely target: 3,600
Upside potential: '11%

The week started with PSU bank index hitting a new 52-week high and showing stability above 3,000 level. The next immediate resistance falls at 3,400 and the momentum seems to be heading in the same direction. On the downside, the 2,900 level is a decisive mark and as long as it is held aggressively, the underlying trend stays bullish. In addition, the up move above 2,800 exhibits a breakout of “Inverse Head and Shoulder”, as per to the daily chart. CLICK HERE FOR THE CHART

State Bank of India (SBIN)
Likely target: Rs 600
Upside potential: '11%
 
The shares of State Bank of India exhibit a strong support of Rs 520 level and unless it does not get violates, the uptrend shall continue to attract market participants. It does have a minor resistance at Rs 540, according to the daily chart, but the constant attempt to conquer this hurdle reflects a bullish sentiment. The medium-term trend points at Rs 600-mark.  CLICK HERE FOR THE CHART
 
Also read: RBI policy calms bond, equity markets. How analysts interpret the decision 

Bank of India (BANKINDIA)
Likely target: Rs 64
Upside potential: 12%

The “Double Bottom” breakout at Rs 55 displays a strong rally in an upward direction. It does face a minor hurdle at Rs 59, but the strong momentum continues to absorb the selling pressure. The accumulation range remains between Rs 55 to Rs 56 levels, which are closer to 50-day moving average (DMA) placed at Rs 54.15  and 100-DMA sets at Rs 56, also posses the support. The stock is heading towards its 200-DMA, located at Rs 64. CLICK HERE FOR THE CHART
 
Bank of Baroda (BANKBARODA)
Likely target: Rs 135
Upside potential:  17%

The shares of Bank of Baroda are gradually rising upward with the breakout above 200-DMA. For a very short-term, this stock has a support of Rs 100 and could easily jump to Rs 135, based on the weekly chart. The volume structre demostartes the rising interest of market players, which confirms the optimistic outlook. The Relative Strength Index (RSI) has a formation of “Inverse head and Shoulder” suggestive of the positive breakout. CLICK HERE FOR THE CHART
 
Union Bank (UNIONBANK)
Outlook: Needs to conquer 200-WMA

The Union Bank could see over 20 per cent jump, when it conquers the 200-weekly moving average (WMA), placed at Rs 53.40 level. At the lower end, the support of 50-WMA can contain any negatve bias. Overall, this present scenario displays a sideways to consolidation phase for the stock, as per the weekly chart. CLICK HERE FOR THE CHART