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NSE Banking: Next lower levels to be watched is around 17500 in the next 2-3 weeks

HDFC Sec | 05 Dec, 2016  | Follow Author | Add to my Favourites 
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Daily Timeframe: The banking sector has shifted into consolidation this week and showed lack of strength to sustain the highs. Presently, the sector is finding strong resistance around 18700 levels as per the concept of change in polarity (brown dashed line) and is now placed on the edge of sliding below the key support of 200day EMA (green curvy line around 18350 levels).

- The major sector participants like SBIN, ICICI Bank, Axis Bank are all showing minor weakness from the highs. Other banking stocks like Yes Bank, Kotak Bank, IndusInd Bank, BOB, Can Bank, PNB and Fed Bank are all showing weakness after the consolidation.

Weekly timeframe: After witnessing sharp weakness in the previous couple of weeks, the banking sector halted its sharp down trend temporarily this week and closed lower by around 260 points, as per w-o-w basis.

- We observe a formation of long legged doji type candlestick pattern this week at the minor weekly support of around 18150- 18200 levels, but the sector is still showing lack of strength to sustain the highs. Normally, a formation of such long legged doji patterns after a reasonable moves are considered as a warning signal for trend reversal.

- But, the overall chart pattern of banking sector is suggesting that this formation of doji could be considered as a temporary halt in down side momentum and the weakness could continue after the consolidation at the supports.

Summing Up:

- The underlying trend of Banking sector is weak and the sector could eventually slide below the immediate support of around 18200-18150 levels. Next lower levels to be watched is around 17500 in the next 2-3 weeks.

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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor accept any liability whatsoever arising from the use of any of the above contents.

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