Daily Timeframe: The recent upside bounce back seems to have completed in banking sector, as this sector has slipped into decline in the last couple of sessions.
- The upside bounce back was not able to sustain above the prior broken support of up trend line (brown line at 24400 levels) and slipped into decline. Friday, though sector declined sharply, but was able to show lower levels recovery, as per closing.
- Among sector participants, most of the banking stocks are in a down trend and are showing lower top formations. PSU banking stocks are showing weaker trend than frontline banking stocks.
Weekly timeframe: After a sharp decline of last week, the banking sector shifted into consolidation during this week and closed the week higher by around 89 points as per w-o-w basis. The downside break of up trend line (green dashed line) of last week is intact and that broken support is now acting as a strong resistance.
- We observe a formation of doji type candle pattern this week, within a high low range of previous bear candle. This pattern is not signaling any prediction, except consolidation after a sharp decline or temporary halt in downside momentum.
- We observe a formation of significant three candle top reversal pattern of ‘evening star’ as of last week and this week’s consolidation is unlikely to impact the negative implication of the pattern. Hence more weakness is expected for near term.
Click here to read the full report
- The underlying trend of Banking sector is weak and there is a possibility of some more weakness for near term. The formation of significant top reversal pattern and the overall negative chart set up is indicating a downside target of around 22900 levels for banking sector, which could be achieved in the next 3-4 weeks.