Heavyweights drive Bank Nifty to all-time high

Moody's upgrade of India’s rating to Baa2 from Baa3 buoyed the market sentiments, where benchmark indices witnessed the second straight day of recovery with gap up opening in today’s session. Almost all sectors opened on a positive note, but it was Bank Nifty which also gave a gap up opening breaching its all-time high level after nearly 1.5 weeks of consolidation.

We had talked of SBI, which had formed a pennant pattern on daily charts which witnessed a bounce back after a pullback. Even ICICI Bank has been trading on a positive note from last four weeks with a prolonged consolidation breakout. It was only HDFC Bank which holds highest weightage in the Bank Nifty had refrained Bank Nifty from gaining momentum with its sluggish movement since last one month.

Bank Nifty had hit almost a triple top pattern at 25,695 levels and thereby witnessed some volatility on daily basis forming a triangular pattern on the charts. Today Bank Nifty gave a downward sloping trend line breakout with justifiable volumes and 14-period RSI positive crossover. Going forward, Bank Nifty may correct for gap-filling up to 25500-25480 levels for a further bounce back. The banking stocks might gain positive momentum ahead of the scheduled RBI policy review on December 6.