SBI, BoI, IOB: 5 PSU bank stocks that look good on the technical charts

Even as the charts suggests that the Nifty PSU Bank index may exhibit some volatility in the near-term, select shares can potentially rally up to 13 per cent from current levels.

Shares of PSU Banks continue to hog the limelight on the bourses with sheer outperformance compared to the benchmark index.

The NSE PSU Bank index has rallied over 28 per cent so far this calendar year as against a mere 2.8 per cent gain on the benchmark Nifty 50 index.

In the past two years, too, the state-run bank index has overwhelmingly outperformed the Nifty 50 with a rally of 67.4 per cent in 2023 and 87.3 per cent in 2022. In comparison, the Nifty notched up 23.8 per cent and 13.4 per cent gains in the respective years.

Going ahead, here's what the charts suggest for the Nifty PSU Bank index and select banking shares.

Nifty PSU Bank

Current Level: 7,305

Bias: Volatility likely

Resistance: 7,370; 7,525

Support: 7,050; 6,850

The Nifty PSU Bank index is seen trending in a rising channel, making higher highs and higher lows since October 2023 on the daily chart. In case of dips, the index has consistently found around its short-term (20-DMA) daily moving average. 

Towards end of February, too, the index tested support around its 20-DMA and then bounced back to test the higher-end of the anticipated trading band. Today, the index is seen testing resistance around the higher-end of the daily Bollinger Bands, which stands at 7,370. CLICK HERE FOR THE CHART

The weekly chart suggests, that the index can stretch it’s up move to 7,525-odd levels in near-term. However, one needs to be cautious at current levels given the overbought conditions on multiple time-frames.

Key momentum oscillators on the daily chart are exhibiting a divergent trend. Thus, signaling possible volatility in the near-term.

Failure to break and sustain above 7,370 levels, could see the index slip back towards its 20-DMA at 7,050-odd levels, below which the next support stands at 6,850 levels.

The long-term chart suggests, that the overall bias for Nifty PSU Bank index is likely to remain positive as long as the index sustains above 6,930 levels on a monthly closing basis.

SBI

Current Price: Rs 779

Upside Potential: 3%

Support: Rs 755; Rs 735

Shares of India's largest state-run bank are trading on a positive note on the daily charts, based on the price-to-moving averages action. The stock is seen comfortably placed above all its key averages, with near support seen at Rs 755 - its 20-DMA. CLICK HERE FOR THE CHART

On the long-term scale, the stock has given a breakout in February, and now seeing to build-on the gains. Chart suggests that the bias for the stock is likely to remain favourable as long as the stock sustains above Rs 735 on a monthly closing basis. On the upside, the stock may target Rs 800-mark in the near-term.

Bank of India (BoI)

Current Price: Rs 140.40

Upside Potential: 10%

Support: Rs 138

Resistance: Rs 146

Shares of Bank of India are seen sustaining above the 20-DMA for the fourth straight trading session on Wednesday. Among the key momentum oscillators, the RSI (Relative Strength Index) and Stochastic Slow have given a positive divergence on the daily scale. The MACD (Moving Average Convergence-Divergence) too is likely to turn favourable.

As such, the near-term bias for the stock is likely to remain positive as long as the stock sustains above Rs 138. Breakout above Rs 146 level can trigger fresh momentum with a likely upside to Rs 155. CLICK HERE FOR THE CHART

IOB

Current Price: Rs 67.60

Upside Potential: 13%

Support: Rs 66.80

Resistance: Rs 71.70

The stock after a week-long consolidation, broke above its 20-DMA on Tuesday, alongside a positive divergence on the daily RSI. The near-term bias for the stock is likely to remain positive as long as the stock sustains above its 20-DMA at Rs 66.80.

On the upside, the stock has near resistance at Rs 71.70, above which the stock can potentially rally to Rs 76.50-odd levels. CLICK HERE FOR THE CHART

UCO Bank

Current Price: Rs 58.75

Upside Potential: 13%

Support: Rs 58.40

Resistance: Rs 62.30

UCO Bank chart has a similar pattern to that of IOB. The stock is expected to trade with a positive bias as long as it holds above Rs 58.50 - i.e. its 20-DMA.

On the upside, the stock has near resistance at Rs 62.30, above which the stock can potentially surge to Rs 66.70. CLICK HERE FOR THE CHART

Union Bank

Current Price: Rs 153.50

Upside Potential: 7.5%

Support: Rs 146

Resistance: Rs 155

The key momentum oscillators for Union Bank are all in favour of the bulls. The stock is presently testing resistance around the higher-end of the anticipated trading at Rs 155-odd levels. Break and sustained trade above the same will attract fresh buying momentum at the counter.

On the upside, the stock can potentially rally to Rs 165-odd levels. In case of a dip, the stock may seek support around its 20-DMA at Rs 146. CLICK HERE FOR THE CHART

On the long-term scale, the stock is seen trading above its 200-MMA (Monthly Moving Average) for the third straight month. The same suggests that the overall bias for the stock will remain positive as long as it sustains above Rs 127.