f Bank Nifty moves upward, private sector banks like Axis Bank and HDFC Bank are expected to perform well.Among public sector banks, Canara Bank and SBI have potential for outperformance this week, Sumeet Bagadia, Executive Director at Choice Broking said one should opt for a 'Sell on rise' strategy for Nifty Bank this week, as he suggested four stocks namely Axis Bank Ltd, HDFC Bank Ltd, Canara Bank and State Bank of India (SBI) that have potential for relatively outperform the index this week.
Nifty Bank settled last week at 51,561.20, down 0.22 per cent over its previous week. The weekly chart suggested sideways to bearish signals, as the index failed to hold above the 52,000 level, said Bagadia.
The trend is hinting at a potential downward move, he said. Additionally, a Doji candle was formed this past week, indicating indecision and uncertainty in the trend.
"The Doji candle on the weekly timeframe further suggests confusion in the market, indicating a strong move in either direction depending on the breakout in the coming sessions. This convergence of candlestick patterns points to a potential shift in momentum, with the next breakout likely determining the direction of the trend and signaling a possible pause in the current trend," he said.
Bagadia said Nifty Bank may aim for a downside target of 51,000, followed by 50,800, while a "sell on rise" approach is advisable until the index remains below 52,500.
On the weekly timeframe, Nifty Bank has closed near its short-term (20-day) Exponential Moving Average (EMA), and a breach below this level could lead to further downside, with the medium-term (50-day) EMA acting as the next support, Bagadia said.
"The Relative Strength Index (RSI) is currently at 53.67, showing a recent decline, which indicates weakening momentum. Looking ahead, the index may face significant resistance near the 52,000–52,500 levels. If Bank Nifty moves upward, private sector banks like Axis Bank and HDFC Bank are expected to perform well," he said.
Among public sector banks, Canara Bank and SBI have potential for outperformance this week, he said.
For the ongoing expiry, Nifty Bank's put options have the highest concentration near the strikes of 51,000 and 50,800, suggesting these as potential support levels.
"Conversely, call strikes at 52,000 and 52,500 show significant open interest concentrations, indicating likely resistance levels and suggesting a range of 50,800–52,500 for the weekly expiry. Traders are advised to remain cautious, maintain strict stop-loss levels, and avoid carrying long positions overnight to mitigate potential risks from market volatility," he said.