Wohoo! There’s a wave of excitement sweeping through Dalal Street as the Bank Nifty sprints towards its all-time high of 54,467 — just a whisper away! While global counterparts like the US Dow Jones Bank Index are trailing nearly 20 percent below their 52-week highs, the Indian banking space radiates strength and outperformance.
Now, you might be wondering, "Bank Nifty is driven by private banks, so why the spotlight on PSU banks?"
Well, here's the scoop - when most private banks have already had their moment in the sun, the real magic lies in finding opportunities where the risk-reward ratio is still in our favour. That’s where the Nifty PSU Bank Index steps in — quietly building strength and now breaking out on the charts!
Let’s analyse this rally and decode its meaning, starting with the Nifty PSU Bank Index itself.
Nifty PSU Bank Daily Chart
A glance at the daily chart reveals a textbook inverted head and shoulders pattern, a reliable technical setup often indicating a reversal and the beginning of a new bullish trend.
An Inverted Head and Shoulders Pattern is a bullish chart formation that signals a potential shift from a downtrend to an uptrend. Once the neckline of this pattern is breached, it usually leads to a strong upside move. And guess what? That breakout has just happened!
Adding to the optimism, the Relative Strength Index (RSI) — which was stuck below 50 — has broken out and successfully retested, further cementing the bullish bias.
Now that the index is breaking out, let's discuss the three PSU bank stocks that look potentially bullish on the charts.
State Bank of India (SBI): The Torchbearer of the PSU Pack
The State Bank of India isn’t just the country’s largest public sector bank — it’s also the heaviest hitter in the Nifty PSU Bank index and a key component of the Bank Nifty. Where SBI goes, the PSU pack often follows.
SBI Daily Chart
On the daily chart, SBI mirrors the broader index with its inverted head and shoulders breakout. With RSI also breaking out above 50 and retesting the level, there’s a clear sign of strong bullish momentum setting in.
SBI is officially leading the charge — and it's our first PSU breakout stock to watch!
Canara Bank: Knocking on the Breakout Door
Canara Bank is another gem from the PSU that is stable and showing serious strength.
Canara Bank Daily Chart
On its daily chart, the stock has also formed an inverted head-and-shoulders pattern. Just like SBI, the RSI has popped above 50 and retested, indicating that buyers are stepping up with confidence.
There is a minor resistance at a falling trendline near Rs 98, which also aligns with a key psychological level of Rs 100. Once these levels are breached, Canara Bank could enter a fresh uptrend with potential to revisit its previous high of Rs 128.90.
This one’s gearing up — and it’s definitely on our radar!
Indian Bank: Breaking Free with Volume Power
Indian Bank has been quietly consolidating — but not anymore!
Indian Bank Daily Chart
The stock has broken out from a four-month consolidation zone, and the volumes are speaking volumes. Volume levels are at a three-month high, signalling that the bulls are grabbing the opportunity with both hands.
When a stock breaks out of a range with above-average volumes, it’s a powerful confirmation that the move is genuine. It shows that market participants are actively participating and that demand is far outstripping supply.
With this breakout, Indian Bank completes our trio of PSU Bank breakout stars.
PSU Banks are ready for prime time
While private banks have already sprinted ahead in the current rally, PSU banks are just starting their engines. With technical breakouts across the board and strong RSI confirmations, SBI, Canara Bank, and Indian Bank are shaping up to be potential prime candidates for the next leg of the rally.
The charts are speaking, the momentum is building, and the opportunities are ripe. Whether you are a trader looking for a technical setup or chasing breakout stories, the action is just beginning in the PSU banking space.
Keep your watchlist ready — the PSU banks are back in the game, and they are playing to win!
Note: The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is NOT a recommendation. This article is strictly for educational purposes only.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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