BANK NIFTY ... Oversold !!

Yesterday's news of RBI increasing the Repo-Rate by 25 basis points saw the Banking counters fall today in early trades. But they have recovered and many banking stocks closed with gains of 1-3%.



The BANK NIFTY - an index of banking stocks, is showing signs of getting oversold now and the possibility of a 'corrective' rise is high.

The BANKNIFTY touched the low of 5703 reached day-before-yesterday (double bottom on intraday charts) but rebounded to close at 6000 levels against yesterday's close of 5971.

I expect the BANKNIFTY to correct to 6375 - 6450 levels. This should lead to some short covering in counters like ICICI BANK / SBI / BANK OF BARODA etc.

Those of you who may be short in Banking counters can book profit for the time being.

Happy Trading !!

CA RAjiv D Khatlawala