By Kiran Jani
Bank Nifty reached its all-time high of 54,467 in September 2024. Following this peak, the index experienced a correction, dipping to 47,844 in January 2025—a decline of 7.29%. Despite this pullback, Kotak Bank and ICICI Bank showed relative resilience, delivering returns of 1.61% and -4.20%, respectively, during the same period.
Source: Investing.com
Ahead of the upcoming RBI policy announcement, Bank Nifty has formed a bullish reversal double-bottom pattern on the daily chart, accompanied by a bullish divergence on the 14-period RSI. Additionally, the price has broken out of a falling trendline, indicating growing strength. If Bank Nifty holds above the 49,700 level, it could trigger a sharp short-covering rally, potentially pushing prices towards the 51,000–51,500 range by the February monthly expiry.
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Given this backdrop, Kotak Bank and ICICI Bank display strong technical setups, positioning them as attractive investment opportunities.
1. Kotak Bank:
While Kotak Bank has been one of the most underperforming stocks among private banks in CY 2024, delivering a modest return of 0.35%, current technical indicators point towards a potential breakout.
Key Technical Insights:
- Ascending Triangle Formation: A bullish continuation pattern that highlights the strength of the prevailing trend, suggesting an impending upward move.
- Volume Surge: A noticeable increase in trading volume alongside price movement confirms the breakout’s validity and indicates potential for further upside.
- RSI in Bullish Zone: The 14-period RSI remains bullish territory, reinforcing the stock’s upward momentum and signalling buying strength.
Source: Investing.com
Outlook:
Kotak Bank broke out from its consolidation/ascending triangle pattern at the end of January 2025, retesting the critical resistance level of ₹1,900 for the third time. The stock failed to sustain the breakout in the previous two attempts, pulling back into the triangle pattern. However, the technical setup suggests renewed strength this time as the stock gears up for another breakout attempt.
- Third-Time Test at ₹1,900: The repeated testing of this resistance level indicates strong buying interest.
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