The Bank Nifty continued to outperform the Nifty 50 for the second consecutive session, gaining more than 1,000 points while comfortably defending its opening gap on November 11. Healthy FII buying interest, easing concerns over a potential RBI rate hike amid declining oil prices, strong buying in PSU banking stocks, healthy fundamentals and bullish momentum, as reflected by technical indicators, reinforced the positive sentiment. The banking index has rallied more than 13 percent from its October low and has consistently closed above the previous day's high since November 3, barring the Muhurat trading session.
Technically, the index traded well above its 50-day and 200-day EMAs, while the short-term and medium-term moving averages remained above the long-term moving averages. Further, the 50-day EMA has moved closer to the 200-day EMA, indicating the possibility of a golden crossover and reinforcing the broader bullish structure.
The RSI continued to approach the 80 mark, rising to 78.61, with a strong bullish crossover, although it is now close to the overbought zone. The MACD maintained its upward trajectory, with the green histogram bars expanding for the ninth consecutive session, indicating strengthening bullish momentum.
Going ahead, the banking index could witness some consolidation and profit-booking if it fails to decisively surpass Wednesday's high of 61,394. A sustained move above this level could pave the way for an advance towards its record high of 61,765. In the event of consolidation, the 60,350–60,400 zone is likely to provide immediate support to the index, according to experts.
The Bank Nifty started the session nearly 800 points higher and touched an intraday high of 61,394 before witnessing gradual profit-booking in late-morning trade. The index slipped to an intraday low of 60,376 in late trade, but a recovery during the closing auction helped it regain more than 400 points. It eventually settled at 60,792, its highest closing level since February 26, gaining 1,051 points or 1.76 percent.