Bank Nifty closed above 47,300 following a bullish upsurge in Friday's session. According to a technical analyst at Nuvama, Bank Nifty is now poised to target 49,500 and 50,600 after the technical charts reveal a Morning Star pattern. Bank Nifty has formed a Multiple Inside Candle formation on the monthly charts, indicating compression and often leading to a trend move on a breakout.
As per Manav Chopra, a technical analyst at Nuvama: "Bank Nifty has formed a Morning Star pattern, indicating a bullish undertone. A bullish breakout above the close of 47,100 will establish a bullish trend and indicate targets of 49,500-50,600, coinciding with the resistance of the rising channel."
Technical chart of Bank Nifty showing lower shadows at support| Source: Nuvama
"Bank Nifty has formed several lower shadows at the support of the rising channel, indicating a demand zone around the 46,000-45,000 levels. A bullish breakout above the close of 47,100 will establish a bullish trend and indicate targets of 49,500-50,600, coinciding with the resistance of the rising channel," added Chopra.
The technical chart above shows emergence of the Morning Star pattern confirming a higher bottom formation and making it a bullish setup. "The index is about to close above the 50-DMA, which indicates short-term momentum and which increased the probability of a breakout above the 47,100-resistance band in today's session," said Chopra.
Amongst individual stocks top Picks by Nuvama are SBI, ICICI Bank, Axis Bank, PNB. While short covering candidates include Kotak Mahindra Bank, HDFC Bank, IndusInd Bank.
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