Here's why SBI is still buy-on-dip stock
1 min read . Updated: 06 Mar 2023, 11:16 AM IST
Premium- SBI witnessed strong buying momentum from the lower levels and surpassed the previous week's high of ₹540. The upside targets are ₹590/610. Know the technical indicators of the stock
The Indian Equities witnessed a sharp recovery on March 3 throwing the bears out. The highest gainer in this pullback rally was the PSU Bank index which was up by 9.71% last week. The Metal index followed it which was up by 3.7%. The broader market such as midcaps and small caps also witnessed strong buying and were up by 1.98% and 1.17%, respectively, for the week ended March 3.
On the daily chart, the Nifty index has given a consolidation breakout, suggesting a rise in optimism. On the higher end, it found resistance around the 14-day moving average. The short-term trend remains negative as the index closed below the critical short-term moving average. The momentum oscillator RSI is in a bullish crossover on the daily timeframe. On the higher end, the Nifty may move higher once it moves above 17650; on the higher end, resistance is visible at 17,800. On the lower end, support is visible at 17,470.
The BANK NIFTY index on the weekly chart has found support near 39,500 which was the previous swing low. The index has witnessed a pullback rally and is likely to head higher toward the level of 42,000 where stiff resistance is visible. The index in the coming week is likely to trade in the range of 40,000-42,000 and within the range, the undertone remains bullish with a buy-on-dip approach.
The Nifty PSU BANK index witnessed a sharp recovery from the lower levels and formed a bullish engulfing candle which is a bullish reversal pattern. The index filled up its previous gap of 3,600 which will now act as strong support. The index is likely to witness strong momentum buying in the upcoming week which can take the index higher toward the 4,100-4,200 levels. The index remains in a buy-on-dip mode with immediate support at 3,850.
SBI witnessed strong buying momentum from the lower levels and surpassed the previous week's high of ₹540. The momentum indicator RSI has given a positive crossover which confirms the buy signal. The stock surpassed its previous 10 days volume high which confirms the strong buying interest among the participants. The stock remains in a buy-on-dip mode with strong support at ₹540 and the potential upside targets are ₹590/610.
The author, Kunal Shah is Senior Technical & Derivative analyst at LKP Securities