PSU Banks on the Move!

JC Parets
September 13, 2022

PSU Banks are generally slow to catch up on a bullish trend. But speed is not what we're after. We're trying to lock into accuracy. So we wait patiently until the alarm bells go off and then we look into PSUs.

Well, its that time again! We have some stocks here that are displaying strength and some that are just breaking out. Let's take a look at this list, shall we?

Let's start off with an index view, just to see where we're at in the trend.

Guess what we have at an index level when it comes to the PSU Banks? 2-year highs, folks! PSUs had been struggling to sustain above the crucial level of 2,700. As you can see, the price movement in the recent past has been full of whipsaws. We finally have new highs coming off of those whipsaws as well.

With the price gaining momentum, we're looking out for targets close to 3,445 and 3,730.

Click on the chart to zoom in.

Ok, so the trend is positive on an absolute basis. But do we have any update on relative strength?

We may.

Here's the Nifty PSU Bank chart relative to the Nifty 100. Notice that the line chart is making its way to the breakout city! This is of course the sixth attempt to get past this level. But always remember, the more times a level is tested, the more likely it is to break!

Now that we have the index levels in mind, let's take a look at the stock-specific ideas.

First up, is a stock that has been displaying strength for a while now.

Bank Baroda has been marking new 52-week highs over the last couple of weeks. What we have right now, are 2-year highs in price! The price has been forming a base for quite some time, and it looks like the next leg of the rally is now upon us.

With a 2-year base breakout, an indicator in bullish momentum territory, and tailwinds for the sector, Bank Baroda looks good from a medium-term perspective. The price has already achieved our target at 138, the next target to track would be 200 with 138 acting as the risk management level.

State Bank of India is also making its way to new highs. Here, we're looking at a new all-time high in SBIN. The price has been moving sideways for a year now, and finally, we have a breakout!

We are bullish above the risk management level of 512 with a target close to 735.

The last name to discuss today is Indian Bank. The price is trading at a new 2-year high. We're looking at a base breakout formation as the price absorbs all overhead supply near 190.

We are bullish above the risk management level of 190 with a target close to 280.

We're looking for the cleanest levels to track and we landed with these three names. As and when more names get added to the list, we'll keep updating here. What's important to note is the trend that's building here.

Are you invested in PSUs yet?

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team

Filed Under: