Bank Nifty fills the gap, surges 2.4 per cent

Banks together with financial services form integral sectors of the Indian stock markets. For the past many days, the downfall in banks, specifically the PSU Banks, drove the markets southwards. On Monday, the markets bounced back from their crucial support levels, all thanks to short covering in these sectors.

All-in-all, Bank Nifty which had broken its major support at 24,000 with gap-down opening at the end of the last week, bounced back in Monday’s trade surging 2.4 per cent on closing basis. Canara Bank was the top gainer with 10.5 per cent gains followed by Yes Bank, BOB and SBI which closed more than 5 per cent up.

Technically, Bank Nifty opened on a flat note and surged so much so that it could fill the gap it made on last Friday. Bank Nifty had broken its upward sloping trendline at 25,295 on February 14, followed by a pullback and again a retreat from 25,725 on February 27. Recently, Bank Nifty also breached its major supports at 24,050-23,910, followed by 23,610 levels. Thereby, if we treat Monday’s bounce as a pullback, we hold 23,600, followed by 23,525-23,290 as the immediate supports followed by 23,000 mark. However, the bounce is a big body candle with volume spurt and oscillators bounce back from the over sold zone. Hence, if we see some more upside from here, we hold 24,460-24,580 as the resistances followed by 24,950-25,010, which would act as trend reversal.