Indian stock markets started the new year on an emphatic note on Monday, continuing the gains of the last trading session on Friday. Sensex BSE was trading at 59,124.85, up nearly 871 points or 1.50% around 2:15 p.m. Monday. Meanwhile, the larger Nifty50 market was trading at 17,614.80. up 260 points or 1.5 percent from the last closing price.
Of the 15 sector indices, 13 were trading in the green at this time while the other 2 were trading in the red. Bank stocks were in the spotlight today with Nifty Bank, Nifty Financial Services, Nifty Private Bank and Nifty PSU Bank among the biggest winners. Nifty Bank rose 2.4%, while Nifty PSU Bank rose 2.3% in intraday trading.
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Technical analyst Nilesh Jain believes PSU Bank shares are up for a major rally from here. Nifty PSU bank was trading at 2588.45 at this time. All 13 stocks in this index traded positively, with Punjab & Sind Bank (PSB) being the biggest winner. It rose more than 3 percent, followed by Canara Bank and Bank of India. Both stocks gained 2.9% and 2.3% from Friday’s closing price.
Jain, who is assistant vice president (AVP), Equity Research Technical and Derivatives at Centrum Broking, said the index took support at 2430 in the December series and is now showing signs of bottoming out. He is now witnessing a breakdown in lateral consolidation, AVP said. A mover between 2700 and 2800 is seen from current levels.
The rally in this index will be led by some stocks and the largest public sector bank, the State Bank of India (SBI), is expected to take the lead, he added. It will be helped by actions such as Canara Bank and Bank of Baroda. The three actions are also its main recommendations in this segment.
SBI: Buy | LTP: Rs 471 | Target: Rs 500-540 | Stop Loss: Rs 440 | Up 15%
Jain is optimistic about this title and recommends a buy. He said the stock has corrected significantly from highs of Rs 542 and should test it again. He gives two targets at RS 500 and Rs 540.
Canara Bank: Buy | LTP: Rs 205 | Target: Rs 225-240 | Stop Loss: Rs 186 | Up 17%
This stock can be bought at current levels despite today’s gains, Jain said. It has a similar setup to its other PSU banking peers where a correction was seen after a strong rally. Grassroots formation has already taken place and Canara Bank shares are now poised for a hike. It is supported at the 200 day moving average and is now showing a trend reversal.
BoB: Buy | LTP: Rs 83 | Target: Rs 90-95 | Stop Loss: Rs 77 | Up 14%
This is another stock that Jain is bullish on. Bank of Baroda shares broke against the 200-DMA today and looks good for a rise. He took several supports to levels around 77 which should also be treated as his stop loss.
It was up over 2% today at the time of the recommendation.
(Disclaimer: The opinions / suggestions / advice expressed here in this article are solely by investment experts. Zee Business suggests that its readers consult their investment advisers before making a financial decision.)