SBI, Oriental Bank and Allahabad Bank: Should you buy PSU bank stocks?

A new all-time high in SBI after a year, Golden Cross on Oriental Bank and the overall positive trend in Allahabad Bank suggest upsides from the current levels.

A landslide victory to the incumbent Narendra Modi-led BJP (Bharatiya Janata Party) in the 2019 Lok Sabha elections boosted investor sentiment in a big way last week that saw benchmark indices S&P BSE Sensex and Nifty50 rallying nearly 4 per cent.

Sectorally, banks led the rally with the Nifty Bank index surging over 1,760 points or 6 per cent. Nifty PSU Bank index rallied around 13 per cent during the period. So, are PSU bank stocks a good buy? Here's a look at what the technical chart indicates for PSU bank index and its key components -

NIFTY PSU BANKS: Weekly chart suggests if there is a consolidation, even an Inverse Head and Shoulder, one can look for opportunities once the breakout succeeds. The index may witness selling pressure on every swing rise; however, buying can subside the weakness. The level of 3,500 possesses significance, as it is the breakout level. MACD (moving average convergence divergence) is rising above zero line, which is a sign of revival in trend. CLICK HERE FOR DETAILED CHART VIEW

State Bank of India (SBIN): A new all-time high of Rs 364 after a year has built strong positive sentiment. Earlier, when it crossed Rs 300, it witnessed heavy resistance in that period.  Any correction here onwards may see buying happening from a medium term perspective. A stock that has broken out of a bigger resistance should observe rising volumes. The major support comes around Rs 300 with accumulation falling in the range of Rs 320 – Rs 330 levels. The move indicates a rally towards Rs 400 and Rs 440. CLICK HERE FOR DETAILED CHART VIEW

Oriental Bank of Commerce (ORIENTBANK): It is trading well above 200-day moving average (DMA) in the daily chart. A “Golden Cross” has further strengthened the upward rise. Herein, any correction towards 200-DMA has witnessed extensive buying and the stock substantially managed to reverse in upward direction. Although, it could not manage to hold support of 50-DMA and 100-DMA it did not make any negative moving average crossovers either, which suggests positive trend. A rise above Rs 105 may see a rally towards Rs 118 and Rs 123, support stays at Rs 94 and Rs 90. CLICK HERE FOR DETAILED CHART VIEW

Allahabad Bank (ALBK): The overall trend suggests a positive rally for the stock. March has seen a consolidation breakout that lead to a rise up to Rs 59. On the flip side, it has indeed seen a correction of “Descending Triangle” as per the daily chart. Considering the present scenario, it does have a strong support above Rs 35 and Rs 40 and a move that should be heading towards Rs 65 levels. CLICK HERE FOR DETAILED CHART VIEW
 
Bank of Baroda (BANKBARODA): The breakout on Falling channel pattern and double bottom has boosted the positive sentiment for this stock. A major buying is likely to emerge above Rs 150, till then while trending upward if witnessed selling pressure, it can see accumulation around crucial support levels. One significant development in the stock is “Golden Cross” in current month as per daily chart, an evidence of price rise in the near future. Immediate support comes in the range of Rs 120 – Rs 115 and a move towards Rs 160 and Rs 175 can be foreseen. CLICK HERE FOR DETAILED CHART VIEW
               
IDBI Bank (IDBI): The stock has not seen any buying interest of investors and traders lately, as it failed to breakout on crucial levels. It did witness consolidation phase; however, it disappointed on positive breakout as per daily chart. Only after crossing Rs 50, one can start focusing on this stock, otherwise wait for a technical formation that could give decisive break out. For an immediate term outlook, wait for MACD to cross zero line upward for buying signals. Strong resistance is being witnessed around Rs 40 levels on chart, support may come in at Rs 31. CLICK HERE FOR DETAILED CHART VIEW