Daily Timeframe: After the formation of negative candlestick pattern on Thursday, the banking sector (Bank Nifty) was not able to show sharp follow through weakness yesterday and slipped into minor decline.
- Presently, the sector is nearing the key lower levels support of around 20300 levels (brown dashed horizontal line as per the concept of change in polarity). This support is going to offer good base for banking sector on any weakness from here.
- The key sector participants like Axis Bank, ICICI Bank, Kotak Bank, Yes Bank, SBIN, Indus Ind Bank, Fed Bank and Can Bank are all showing consolidations at the higher levels and the underlying trend of these sector participants have not damaged yet.
- Weekly timeframe: After an excellent upside breakout of the key overhead hurdle of down trend line (blue dashed line connecting previous two significant tops around 20480) during last week, the banking sector was not able to sustain the breakout and slipped into decline.
- Though, the sector slipped into weakness last week, the underlying trend as per the larger timeframe is still positive as this sector placed just above the breakout resistance of 20480 levels-blue line, as per the concept of change in polarity. This slight positive indication for banking sector.
- This holding on the support could allow bulls to make an attempt to come back from the lower levels by next week.
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- The Banking sector as per smaller and larger timeframe is in consolidation mode and the underlying trend has not been damaged despite weakness of last week. There is a possibility of upside bounce back in the sector by next week from the lower levels support of around 20300-400 levels.