PSU Banking Trade for April month!

Background Analysis

The NIFTY PSU bank Index has given consistent negative returns across all 6 months except JAN – 22, the FII selling also targeted this sector and was worst performing sector with extremely high volatility during last 2 months.Since Ukraine – Russia conflict has started in Feb 2022 , the index has been struggling to gather strength and momentum , but there is one stock which is comparatively more stable to the overall index i.e STATE BANK OF INDIA.

Trade Analysis

We initiated our trade on SBI on Friday , 25th March 2022 with long bias on short term basis. We believe the stock is showing consolidation and is ready for up-move in April month as long as its above 490 levels. On daily charts the 490 level is the mid way level which if supported by the market can take stock to highs of 530+ .

Trade Recommendation :

Buy SBI at 490 with a stop loss on closing basis of 477 and 1st Target of 518 and next of 527 ( Time frame : 15 – 30 days)

SBI & NIFTY Have a correlation of over 44% ( 1 year data ) with extreme high volatility , hence the momentum of the stock can be on the positive side since the banking index is already at lower levels comparatively.

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