In the initial week of the current month, a significant development was observed in the Nifty PSU bank Index. It successfully breached its horizontal trendline resistance, which had been persisting at the 4650 level. Subsequently, the index has maintained an upward trajectory. It’s noteworthy that the 4650 level had historically posed as a formidable barrier for this index. Prior to this breakout, the index had rigorously tested and retested this specific level on numerous occasions within the preceding two months.
This recurring testing and consolidation near the resistance level often signifies the emergence of a robust breakout. Consequently, there is a compelling rationale to consider the prospects of individual PSU bank stocks. The current scenario may present an opportune moment to contemplate acquisitions and the possibility of augmenting holdings at lower price levels, given the establishment of this newfound trend.
In conclusion, the recent breakout of the Nifty PSU bank Index from its historical resistance level at 4650 suggests a potential shift in the dynamics of PSU bank stocks. However, as with any financial investment, it is imperative to approach such opportunities with a judicious and informed perspective, weighing potential risks and rewards.
Some of the PSU Banks that look attractive:
- Bank of India
- Punjab & Sind Bank
- Uco Bank
- Bank of Baroda
- Foram Chheda, CMT