Nifty PSU Bank Rally - Real or Trap ???
Since US Federal Reserve cut 50 bps points on their interest rates last week - there is so much Hungama on the Media Channels about an impending BLAST on the Nifty PSU Banking Sector
Everyday there is news that the Sector would Rally and as "Anticipated" by so many the PSU Bank index Blasted 3% yesterday and was the Top Gainer among the Nifty peers
But has the Rally Really Started yet ???
Before falling Trap to Media Hype - let's take sometime to analyze - why it MUST Rally now ?
1. There are NO new investments in this sector
2. There is no major policy change from India's PM, FM or RBI
3. Even if there is a News or Interest Rate reduction from RBI.... the technical structures doesn't show upside now
Quarterly Timeframe (On Left)
1) There has been a Non-Stop run of 650% in just 4 years (since Apr 2020)
2) Also, given the September Quarter is just about to end in 4 more sessions, the current candle shows "Bearish Engulfing" candle + "Tweezer Top" formation - both indicating Bearish side
3) On Quarterly - we can also, see the Multi-year Parallel Channel broken out during Jan 2024 and now the price is Retesting the BO zone
4) There are no intermediary Supports created - before reaching the Parallel Channel Retest zone
Daily Timeframe (On Right)
1) The price has already taken a Resistance from a Combination of Falling Parallel Channel + Weekly Resistance and fell -0.86% today
2) The price would further fall down to the bottom of the Falling Parallel Channel around 6,215 zone and then go sideways for some more time
The Monthly Timeframe chart (on Middle)
1) The Price is expected to Bounce once sharply - may be with the news from RBI on Rate Cut - you can see a 1-2 days sharp blast which WILL NOT sustain
2) The price would form a Double Bottom by retesting the Multi-year Parallel Channel and then take a Bullish reversal - by which time it would be end of Current Financial Year
Don't get attracted by a short 1-2 days or even a week blast due to any rate reduction by RBI. As soon as the effect of NEWS subsides the sector would stop or fall again. There is NO juice left for a continuous rally after giving 650% returns
Everyday there is news that the Sector would Rally and as "Anticipated" by so many the PSU Bank index Blasted 3% yesterday and was the Top Gainer among the Nifty peers
But has the Rally Really Started yet ???
Before falling Trap to Media Hype - let's take sometime to analyze - why it MUST Rally now ?
1. There are NO new investments in this sector
2. There is no major policy change from India's PM, FM or RBI
3. Even if there is a News or Interest Rate reduction from RBI.... the technical structures doesn't show upside now
Quarterly Timeframe (On Left)
1) There has been a Non-Stop run of 650% in just 4 years (since Apr 2020)
2) Also, given the September Quarter is just about to end in 4 more sessions, the current candle shows "Bearish Engulfing" candle + "Tweezer Top" formation - both indicating Bearish side
3) On Quarterly - we can also, see the Multi-year Parallel Channel broken out during Jan 2024 and now the price is Retesting the BO zone
4) There are no intermediary Supports created - before reaching the Parallel Channel Retest zone
Daily Timeframe (On Right)
1) The price has already taken a Resistance from a Combination of Falling Parallel Channel + Weekly Resistance and fell -0.86% today
2) The price would further fall down to the bottom of the Falling Parallel Channel around 6,215 zone and then go sideways for some more time
The Monthly Timeframe chart (on Middle)
1) The Price is expected to Bounce once sharply - may be with the news from RBI on Rate Cut - you can see a 1-2 days sharp blast which WILL NOT sustain
2) The price would form a Double Bottom by retesting the Multi-year Parallel Channel and then take a Bullish reversal - by which time it would be end of Current Financial Year
Don't get attracted by a short 1-2 days or even a week blast due to any rate reduction by RBI. As soon as the effect of NEWS subsides the sector would stop or fall again. There is NO juice left for a continuous rally after giving 650% returns
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