After making an all-time high of 44,498.6 on 30 May 2023, the rally didn’t continue and the index witnessed some profit booking. Although there wasn’t much of a correction seen, the momentum has definitely faded. The culprits were HDFC Bank (NS:) and ICICI Bank (NS:), the two highest heavyweights with a combined weightage of 57.62%.
HDFC Bank is trading near the support of INR 1,600 while ICICI Bank is an inch above its support of INR 933. If both these banks break below their respective support levels in the next week, then the possibility of the previous week’s high remaining the highest level for the next week as well will increase. In short, might not be above to scale to a new high. So, these banks with their respective support levels should remain on the watchlist of traders.
But not everything is gloomy in the banking space. PSBs are looking relatively better on the charts. The index jumped 0.98% to 4,093.2 on Friday, closing at the highest since 9 May 2023. This index is relatively much lower from its 52-week high than the private bank index and looks better on the charts solely from the very short-term perspective. Hence PSBs might come to the rescue in the next week.
As per the options chain data, 44,000 CE has the highest open interest (OI) of 2.02 lakh contracts making it a strong resistance. This is also showing the confidence of bears as it is an ITM strike, considering the futures price of 44,110.6. However, put option writing is also taking place at this strike, with an OI of 1.33 lakh contracts. We can clearly see the tussle between bulls and bears and there is also an opposite view forming in the private banking sector, as compared to the public sector.
So all in all, the range for the index for the current 8 June 2023 expiry is 44,500 on the upside and 43,600 on the downside.