Canara Bank, PNB, SBI: How to trade PSU bank stocks post Budget 2021?

A decisive close above 2,000 mark on Nifty PSU index may open doors for 2,200 levels going ahead

Financial sector stocks, especially banks, have been in limelight since Finance Minister Nirmala Sitharaman proposed to divest stake in two public sector banks (PSBs) while unveiling Budget 2021 proposals. That apart, the FM set aside Rs 20,000 crore for recapitalisation of PSBs.

The government will introduce legislative amendments to privatise these banks in the current Budget session. Of the Rs 1.75 trillion divestment target set for the next fiscal, the government expects Rs 1 trillion to come from divestment of its stake in PSBs and financial institutions. READ ABOUT IT HERE

Here's how key stocks from this space look on the charts.
 

NIFTY PSU BANK: A decisive close above 2,000 mark may open doors for the index to hit 2,200 levels in the coming sessions. If that occurs, this breakout may add a strong positive momentum that can PSBs gain more ground. On the downside, until the support of 1,875 is maintained, there are chances that the negative sentiment will not prevail and investors will not create short positions. The immediate closing basis support comes at 1,930 levels. CLICK HERE FOR THE CHART

State Bank of India (SBIN):  Following a strong close above Rs 300 levels, the stock met with a resistance at Rs 324 levels. That said, the overall trend is positive and the counter may rally towards Rs 340 and then Rs 350 in the short-term. Support on a closing basis is at Rs 300 levels. One can expect a strong move above the minor resistance of Rs 330 level, as per the weekly chart. If the Relative Strength Index (RSI) sustains above 65 value, the stock's move upward may be more aggressive. CLICK HERE FOR THE CHART

Canara Bank (CANBK): The medium-term support of Rs 120 indicates a rally towards Rs 180 levels in the days ahead. Going forward, a close above Rs 145 may see more addition in longs, which should see an advance toward Rs 160 levels, as per the daily chart. A positive crossover of Relative Strength Index (RSI) has further strengthened the upside bias. The closing basis support stays at Rs 140 levels with outlook remaining very optimistic. CLICK HERE FOR THE CHART

Punjab National Bank (PNB): This counter needs to conquer the resistance of Rs 38 levels to breakout into a bullish territory. Until that happens, if the counter manages to hold an upside bias above the support of Rs 34 levels, the stock may attempt to cross Rs 38, which is its resistance zone. The Moving Average Convergence Divergence (MACD) is reversing to cross the zero line upward, which also reinforces a positive view. CLICK HERE FOR THE CHART

Indian Bank (INDIANB): The stock is attempting to conquer the resistance of Rs 97. A strong close above this resistance may open doors for it to hit Rs 120 in the days ahead, provided the overall market momentum stays strong. The counter has a support of Rs 85. Though the volume structure shows sluggishness at the current levels, a breakout on the price front may see a strong addition in longs. CLICK HERE FOR THE CHART

Bank of Maharashtra (MAHABANK): The stock has formed a perfect “Inverse Head and Shoulder” pattern on the charts and may see a breakout above Rs 16. It can then head towards Rs 20 and Rs 22 levels. The support comes in at Rs 13, as per the weekly chart. The volume structure clearly shows the interest of market participants, which has been gradually rising since the last few weeks. CLICK HERE FOR THE CHART