You’d have to be a part of the market for quite some time to be able to claim that you witnessed a bull run in the PSU Banks sector. This sector is notorious for perpetual underperformance regardless of the market sentiment.
Well, maybe that’s changing. Over the past two weeks, these hibernating stocks decided to wake up and join the party. Looks like they finally received the invite for the ongoing rally!
A move above 1,900 in the PSU Banks Index is crucial and here’s why. This level has played the role of strong support for close to seven years. With the breach of this level in early 2020, the principle of polarity would mean that 1,900 would turn into stubborn resistance. The fact that PSU Banks has broken out of this resistance rather quickly, hints at the strength that’s building in this index.
We are bullish above 1,900, for targets near 2,645 & 3,445.
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Relatively speaking, the PSU Banks Index has broken out of its resistance zone and is ready for the next leg of the rally. One could also say that there has been an inverted head & shoulders pattern breakout at the bottom which often act as strong reversal patterns.
Now let’s take a look at some actionable ideas at current levels that look attractive on the long side for the next few weeks and months.
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