Bank Nifty Outlook for the week 8th MAY to 12th MAY

 

BANK NIFTY

Last week, the Bank Nifty Index hit a high of 43739.80 and closed near its low at 42661.20, indicating a 1.32% decrease compared to
the previous week's close. The weekly chart shows a Dark Cloud
Cover, suggesting a shift in momentum towards the downside from the previous price rise. Moreover, a bearish candle formation can be observed on the weekly charts. Although the index traded flat to positive for the week, on the last day, it lost all its momentum and closed negative by 1024.25 points, led by HDFCBANK, which plummeted by approximately 6% on Friday.

If Bank Nifty continues to move further down, HDFCBANK is likely to fall more than other banks as its technical weakness became apparent after the gap down on Friday. However, if the index reverses from support, ICICI BANK and KOTAKBANK may lead the way on the upside. In PSU Banks, SBIN and BOB are expected to lead the rally on the higher side.

As of now, BankNifty May Futures are trading with a 51-point premium. On the options front, the OI distribution for BankNifty Put options shows that 42000 has the highest concentration, which may act as support for the current expiry. Meanwhile, Bank Nifty Call strikes 43000 and 43500 saw significant OI concentrations and may act as resistance for the current expiry.

The BankNifty has strong support levels at 42000-41850, and if the index breaches these levels, it could further fall towards 41200 levels. On the other hand, the Bank Nifty has strong resistance near the 43700-43900 range. If the index closes above the mentioned resistance level, a breakout could take it towards all-time high levels.

In conclusion, the Bank Nifty Index has seen a shift in momentum towards the downside, with HDFCBANK leading the fall. However, if the index reverses from support, ICICI BANK and KOTAKBANK may lead on the upside. Additionally, traders should keep an eye on the support and resistance levels to make informed trading decisions.