 "Banks")
Shares of financial companies were in focus on Monday after the Reserve Bank of India’s (RBI) internal working group (IWG) reviewing the corporate structure of private sector banks, last week suggested sweeping changes in bank ownership, including allowing large corporate and industrial houses to own banks by amending the Banking Regulation Act, 1949.
The other significant proposal is to allow large non-banking financial companies (NBFCs) with asset size of Rs 50,000 crore and above (including those within the fold of corporate houses), and with a decade’s track record, to convert to banks.
Reacting to the news, shares of banks, NBFCs, and microfinance institutions (MFIs) rallied up to 20 per cent in the trade. For instance, Equitas Holdings and IDFC were locked in the 20 per cent upper circuit at Rs 63.40 and Rs 40.10, respectively on the BSE while Ujjivan Financial Services, Ujjivan Small Finance Bank, IDFC First Bank, AAVAS Financiers, Shriram City Union Finance, Bajaj Holdings & Investments, and IndusInd Bank gained between 5 per cent and 16 per cent on the BSE. In comparison, the benchmark S&P BSE Sensex was trading flat at 43,872.44 levels, down 0.02 per cent.
Let's take a look at what technical charts suggest for select financial stocks and what should be your trading strategy after RBI's new ownership proposal.
Ujjivan Financial Services Limited (UJJIVAN): With a sharp up move on November 23, the stock is heading towards the next resistance 200-WMA located at Rs 306 levels. If the stock manages to conquer Rs 306, then the upside bias may see a rally towards Rs 340 and Rs 350 levels. The support stays at Rs 275 levels, which is its 100-WMA. The trend looks promising as MACD is crossing the zero line upwards, as per the weekly chart. CLICK HERE FOR THE CHART
Equitas Holdings Limited (EQUITAS): A 20 per cent upper circuit at Rs 63.40 has a resistance of 50-WMA placed at Rs 63.85 levels. If this resistance gets conquered in the coming sessions, then the rally may see a move towards Rs 70 and Rs 74 levels. The support comes in at Rs 58 and Rs 56 levels. CLICK HERE FOR THE CHART
Ujjivan Financial Services Limited (UJJIVAN): With a sharp up move on November 23, the stock is heading towards the next resistance 200-WMA located at Rs 306 levels. If the stock manages to conquer Rs 306, then the upside bias may see a rally towards Rs 340 and Rs 350 levels. The support stays at Rs 275 levels, which is its 100-WMA. The trend looks promising as MACD is crossing the zero line upwards, as per the weekly chart. CLICK HERE FOR THE CHART
Equitas Holdings Limited (EQUITAS): A 20 per cent upper circuit at Rs 63.40 has a resistance of 50-WMA placed at Rs 63.85 levels. If this resistance gets conquered in the coming sessions, then the rally may see a move towards Rs 70 and Rs 74 levels. The support comes in at Rs 58 and Rs 56 levels. CLICK HERE FOR THE CHART
IndusInd Bank Ltd (INDUSINDBK): The weekly chart indicates a breakout above the 50-weekly moving average (WMA) at Rs 750 levels. This up move is well supported by the Moving Average Convergence Divergence (MACD), which has successfully conquered the zero line. The trend is highly optimistic with a rally moving in the direction of Rs 1,000 levels. The support comes in at Rs 780 and Rs 750 levels. CLICK HERE FOR THE CHART
Bajaj Finserv Ltd (BAJAJFINSV): In less than 15 sessions, this counter has surged over 50 per cent. This move may see some profit booking around Rs 8,900 levels. The trend is positive however, profit booking is expected with such up move. The closing basis support comes in at Rs 8,200 levels and the RSI is trading in overbought condition for quite a while indicating mild corrective moves, as per the daily chart. CLICK HERE FOR THE CHART
Housing Development Finance Corporation Ltd (HDFC): With a “Golden Cross” on the daily chart, this counter is set to rise in the coming sessions. This move may see a gradual rise as the RSI is declining from the overbought condition. The chart formation has strong support of Rs 2,150 levels. The medium-term indicates a rally towards Rs 2,700 levels. CLICK HERE FOR THE CHART
HDFC Bank Ltd (HDFCBANK): This counter is scaling a new all-time high with strong upside sentiment. The overall trend is moving in the direction of Rs 1,700 to Rs 1,900 levels from the medium-term perspective. The closing basis support comes in at Rs 1,350 levels.There is a bearish divergence on the Relative Strength Index (RSI), yet the stock price is not showing any major weakness, as per the daily chart. CLICK HERE FOR THE CHART
