SBI to pull Bank Nifty up with a breakout

This time it was banking sector that trailed against the markets wherein Bank Nifty index has witnessed a bounce back after a pullback of two days. Bank Nifty had given a multiple resistance breakout at around 25000 levels on November 01, witnessed a consolidation for three sessions and then witnessed a pullback almost up to the resistance trendline level.

It was in today’s session that Bank Nifty has given a bounce back which gained nearly 0.8 per cent despite subdued benchmark indices, driven by strong performance by SBI. SBI which holds more than 10 per cent weightage in the Bank Nifty index, surged as much as 6.4 per cent on positive Q2 earnings.

Technically, SBI had witnessed a sharp rise on October 25 where all PSU Banks gave dynamic impulse after Government announced recapitalisation of PSU Banks. That day SBI gave a resistance breakout at 315 levels and had witnessed consolidation thereafter as if Pennant Pattern is in the making. Today SBI has given a pennant pattern breakout at 330 with huge volumes and 14-period RSI positive crossover at 61 levels. With this SBI is likely to give some more momentum going forward which may take Bank Nifty to new highs.