Indian benchmark indices have lately been trading with a bullish undertone. There is bullish structural confirmation in the daily and weekly charts of mid-tier PSU banks that are attracting strong investor attention.
Mid-tier PSU banking stocks have been witnessing strong accumulation and base formation near the support zone within a broader consolidation pattern, according to brokerage firm Nuvama Institutional Equities.
"The current formation suggests that the sector is poised for new highs, supported by strong relative outperformance and bullish momentum. The technical parameters of this sector have improved significantly in terms of price, volume, and trend confirmation. We recommend buying on dips," said Manav Chopra, Director - Technical Analyst at Nuvama Institutional Equities.
"The broader theme looks positive and hints at a significant upside unfolding in the coming months," he added.
Chopra's top picks from the basket are Indian Overseas Bank and Maharashtra Bank.
Indian Overseas Bank (IOB)
- Recommendation: Buy (in Rs )
- Current Price: 69.6
- Target Price: 97
- Stop Loss: 58
- Potential Upside: 45 percent
Bank of Maharashtra (MAHABANK)
- Recommendation: Buy (in Rs)
- Current Price: 68.0
- Target Price: 100
- Stop Loss: 60
- Potential Upside: 48 percent
Weekly Chart showing candlestick pattern of Bank of Maharashtra scrip | Source: Nuvama
Daily Chart showing candlestick pattern of Bank of Maharashtra scrip | Source: Nuvama
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