Nifty PSU Bank index can rally up to 13%; check top stock picks

The PSU Bank index has rallied 31 per cent as against a 16 per cent surge in the benchmark from June lows; Among stocks, Bank of Baroda, Indian Bank and Union Bank of India can rally up to 16%.

Even as the benchmark indices, the BSE Sensex and Nifty 50,  were seen 2 per lower on Friday when compared with their very recent peaks, the Nifty PSU bank index scaled fresh high and now signals a likely move towards new 52-week high. 

The PSU Bank index has rallied 31 per cent when compared to the benchmark indices which surged 16 per cent from their June lows so far. 

Among individual stocks, Union Bank of India has zoomed 3 per cent; while Bank of Baroda and Indian Bank were seen holdings gains of 2.5 per cent gains each on Friday. All the constituents of the Nifty PSU Bank Index were trading in green, up more than a per cent each. 

Shares of Indian Bank and Bank of Baroda logged fresh 52-week highs in intraday session on Friday post surging 39 per cent and 37 per cent, respectively, from June lows. 

Here’s the technical outlook that sheds light on the likely next move on the Nifty PSU Bank index and select stocks:- 

NIFTY PSU BANK (NIFTYPSUBA)

Likely target: 3,133 and 3,400

Upside potential: 4.50 to 13%

The 52-week high for the Nifty PSU Bank index stands at 3,133.50-mark, which the index seems to be eyeing on an immediate scale. The chart pattern with supportive formations points at a decisive up move. The rally might extend beyond the current 52-week mark and further scale to 3,400 level. The immediate support for the index exists at 2,850 and 2,800.

While there is a RSI negative divergence on the daily chart, the index momentum has not let selling pressure weigh on it.  CLICK HERE FOR THE CHART

State Bank of India (SBIN)

Outlook: Trend is stable over Rs 510 mark

Shares of State Bank of India exhibit a “Falling channel pattern”, which might dent the positive bias. However, if the stock succeeds to overturn the selling pressure existing around the Rs 535-mark, the bulls could make a strong comeback and take control. Thus far, cushion for the stock is seen at Rs 510 level, which it must adhere on a closing basis. CLICK HERE FOR THE CHART

Bank of Baroda (BANKBARODA)

Likely target: Rs 140.40 and Rs 150.

Upside potential: 9% to 16%

Bank of Baroda shares are all set to scale 2019 highs of Rs 140.40-mark as the robust “Higher High, Higher Low” formation continues to support bulls since March 2021. In addition, the stock broke out of the “Golden Cross” pattern, shows the weekly set-up. The trend is optimistic and the chart outlook supports the bullish sentiment. The stock has support at Rs 110 level and hints at a rally towards Rs 150. CLICK HERE FOR THE CHART

Indian Bank (INDIANB)

Likely target: Rs 225

Upside potential: 15%

Post conquering the 2021 high of Rs 185.20 mark, the stock gathered strength to breakout on the upside. The daily bullish candlestick, having the support of strong volumes, further points at higher heights. The stock has a minor barrier at Rs 200 and once that gets overthrown, the stock would easily rally to Rs 225 level.  Support for the stock comes at Rs 180 level. CLICK HERE FOR THE CHART

Union Bank of India (UNIONBANK)

Likely target: Rs 49

Upside potential: 13%

There is an “Inverse Head and Shoulder” breakout on the daily chart. A breakout instilling strong volumes suggests a greater interest by market participants. The immediate support for the stock stands at Rs 41 and Rs 39 and the trend suggests a move towards Rs 49 mark, which is also the target of the chart pattern. CLICK HERE FOR THE CHART