Bank Nifty rises after two days; HDFC, Canara Bank lead gains: What lies ahead?

Bank shares rise in trade.

• Bank Nifty rebounds after two-day loss, HDFC Bank leads gains.
• HDFC Bank rises up to 3 percent; Canara, Axis Bank also advance.
• Immediate support for Bank Nifty seen at 60,000–59,900 zone.

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Bank Nifty rose in Monday’s trade after declining for two consecutive sessions, supported by buying across banking shares.

The index had fallen nearly 1 percent over the previous two sessions but recovered most of the losses during the day.

HDFC Bank emerged as the top gainer, rising up to 3 percent. At around 1 pm, the stock was trading at Rs 927.95 apiece on the NSE, up 2.7 percent.

Canara Bank advanced 1.95 percent, while Axis Bank gained 1.65 percent.

Among other constituents, Bank of Baroda, Punjab National Bank and Kotak Mahindra Bank rose up to 1 percent.

Eleven of the 14 index constituents were trading higher.

Sudeep Shah, Head – Technical and Derivatives Research at SBI Securities, said Bank Nifty had traded within a 431-point range over the last four sessions and has now broken below the lower end of the consolidation zone.

"The breakdown was accompanied by a bearish daily candle. RSI, which had plateaued near 60, has started turning down, suggesting bulls are losing grip around the key support area," he said.

He added that the immediate support for Bank Nifty is placed in the 20-day EMA zone of 60,000–59,900. "Any sustained move below this zone could lead to the index extending its weakness towards 59,500, followed by 59,000 in the short term. On the upside, the zone of 60,500–60,600 is likely to act as an immediate resistance," Shah said.

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