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Bank Nifty / Bank Nifty Futures 9th Nov 2015
Bank Nifty today staged a good recovery from the lower end. After making a low of 16911 in the morning Bank Nifty started giving a decent pullback and finally managed to close the day at 17113. Bank Nifty has a critical support at 16700 Bank Nifty spot level mentioned and if Bank Nifty breaks below 16700 then it will signal major problem for the sector with immediate effect. Traders and Investors holding Bank Nifty / Banking Sector stocks (both private sector banks and public sector banks need to be very careful as once 16700 is taken out on a closing basis for 3 days or 16700 is taken out with above average volumes then gates open lower till 12855. Yes 12855 hence extreme caution is advised.
As we have mentioned it will be prudent to switch out from this sector and get into sugar but if there has to be compulsive exposure to the sector then one can buy or accumulate or take exposure to HDFC Bank and Indusind Bank. Axis Bank and Icici Bank will underperform the private sector banking space. Their fee incomes will go for a toss in the coming time due to immense competition from wallet payment gateways. The sheer growth in transactions per day from payment wallets like Pay TM says it all. Both these banks have significant fee income derived from retail segment which is steadily moving to wallet and hence we do not see fee income growth in any significant manner going forward.
Axis Bank and Icici Bank both the banks have been consistently making classic lower tops and lower bottoms and we do not recommend to bottom fish which such chart structures are continuing. We have advised our clients to wait for bottom formation signals in both the stocks.
Good Trading To You!