When the whole world went for a lock-down and economy brought to the brink of the collapse entire global equity markets saw a V-shape recovery except the Indian Banking Sector.
Somehow long term investors are not confident enough about the growth story in the banks after Covid-19. Even on the Monthly charts, it is hard to visualize any long term activity happening on Nifty Bank Index despite the steep recovery in Nifty.
Even before the COVID-19 pandemic, they were constantly in the news for all the wrong reasons. Year to Date still the Index is down by more than 33% and failure at the faster rate put the sector under serious trouble from investing perspective.
Poor credit offtake, Rising Bad Debts & NPAs, Continued operational interference due to COVID-19 are the fundamental reasons attributed to the fall and made the investors stay risk-averse in this sector.
Bank Nifty Weekly Charts
The weekly timeframe is consolidating and withholding negative sentiments spells trouble from the medium timeframe perspective. Immediate Medium-term resistance formed around 22500 levels. For any medium-term turn around Bank Nifty index have to break above 22500 levels
Nifty Bank – Daily Timeframe
Bank Nifty ended with sideways mode post the March 2020 crash and thus far only the extreme volatility got faded to a fair extent in the last 5 months. However no signs of investing money flocking to the Banking sector.
Overall Short term and medium-term outlook for the Banking sector holds trouble. One of the Cautious times if you are an investor/short term investor in this counter.