In the recent market landscape, Indian benchmark indices have notably displayed a bullish undertone, signaling optimism among investors. Particularly noteworthy is the bullish structural confirmation observed in both the daily and weekly charts of mid-tier PSU banks, which has captured significant attention from investors.
According to insights provided by brokerage firm Nuvama Institutional Equities, mid-tier PSU banking stocks are currently experiencing a phase of strong accumulation, coupled with the formation of bases near crucial support zones within a broader consolidation pattern. This suggests a potential for these stocks to reach new highs in the foreseeable future, propelled by robust relative outperformance and bullish momentum.
Manav Chopra, Director - Technical Analyst at Nuvama Institutional Equities, emphasised the favorable technical parameters exhibited by this sector, encompassing improvements in price dynamics, volume trends and confirmation of the upward trajectory. In light of these developments, Chopra recommended adopting a strategy of buying on market dips to capitalise on the sector's promising prospects.
Furthermore, Chopra expressed optimism regarding the broader theme within the sector, foreseeing a significant upside potential unfolding in the coming months. As part of his investment recommendations, Chopra highlighted two specific picks from the mid-tier PSU banking segment: Indian Overseas Bank (IOB) and Bank of Maharashtra (MAHABANK).
For Indian Overseas Bank (IOB), Chopra advised initiating a buy position at the current market price of Rs 69.6, setting a target price of Rs 97, and implementing a stop loss at Rs 58. This recommendation implies a substantial potential upside of 45 per cent from the current levels.
Similarly, for Bank of Maharashtra (MAHABANK), Chopra suggested a buy strategy, with a current market price of Rs 68.0. He set a target price of Rs 100 and recommended placing a stop loss at Rs 60. This investment approach indicates a significant potential upside of 48 percent relative to the current price.
In summary, the bullish sentiment pervading the mid-tier PSU banking sector, combined with favorable technical indicators and market dynamics, presents an opportune moment for investors to consider strategic investment positions in stocks like Indian Overseas Bank and Bank of Maharashtra.
