Chart Reading: 'Golden crossover' on Nifty Bank to fuel banking stocks

The Nifty50 index is heading towards breakout level, while Nifty Bank is trading with positive sentiment. The scenario signals stocks in the indices are showing patterns that will attract buying. The Nifty Bank with positive sentiment is on the verge of making 'Golden crossover' as per the daily chart.

Golden Crossover

A Golden Crossover occurs when the short-term average crosses/moves above the long-term moving average. The scenario depicts a short-term trend getting stronger as compared to the long-term trend. It helps traders and investors to acknowledge the strength of the overall index.

Nifty Bank

The Nifty Bank has crossed the recent high of 27,369 levels, however, benchmarks Nifty and Sensex are yet to conquer their respective highs. The Nifty Bank index has sustained above 27,000 levels with major moving averages providing support. At the current levels of 27,200, the index is in the process of making Golden Crossover pattern, chart suggests. The completion of Golden crossover will lead to more buying in major banking stocks. Above 27,500 levels, the index may witness strong buying leading towards 28,000 and 28,300 levels, as per the technical patterns.

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Stocks that are on the verge of "Golden Crossover" in banking sectors are as below -

•  
• HDFC BANK
• Federal Bank