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.
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.
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.
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. A decisive breakout above this level could trigger a robust upward move.
- Crucial Support at ₹1,800: Holding above ₹1,800 is key. This level acts as a strong support zone, and maintaining it strengthens the bullish bias.
- Bullish Momentum Building: With the stock consolidating near the breakout zone, rising volumes, and a bullish RSI, the setup points towards a potential upside in the near term.
- If ₹1,800 holds as support, Kotak Bank could witness a sharp rally, potentially breaching ₹1,900 decisively and continuing its upward trajectory.
ICICI Bank
ICICI Bank had an impressive run in 2024, posting a solid 28% gain before facing a correction from its peak of ₹1,362 in October 2024. However, the stock shows signs of a renewed bullish trend based on key technical indicators.
Key Technical Insights:
- Inverted Head and Shoulders Pattern: A classic bullish reversal pattern has formed at the recent bottom, indicating a potential trend reversal and paving the way for an upward breakout.
- Support from Rising Channel: The stock has found strong support at the lower boundary of a rising channel, which has been intact since 2024. This reinforces the stock’s long-term bullish structure.
- RSI Showing Strength: The 14-period RSI reflects bullish momentum, suggesting that buying interest is picking up, which could fuel further upside.
Outlook
After correcting from ₹1,362 to ₹1,186 over the past five months, ICICI Bank appears to have completed its correction phase and is now trading within a strong accumulation zone. Multiple short- and long-term support levels reinforce the likelihood of a bullish reversal from current levels.
- Strong Accumulation Zone: The stock consolidates after the correction, indicating that buyers gradually accumulate positions, setting the stage for an upward move.
- Crucial Support at ₹1,200: Holding above ₹1,200 is key. This support level serves as a strong base, and maintaining it could trigger a fresh rally in the near term.
- Bullish Technical Indicators: The combination of support levels and improving momentum indicators suggests a high probability of an upward breakout.
Private Bank Stocks Setting Up for a Brighter Future
Beyond the rate cut expectations from the upcoming RBI policy, the technical setups of Bank Nifty, Kotak Bank, and ICICI Bank are showing strong bullish signals.
- Bank Nifty: Forming a bullish reversal pattern with breakout potential.
- Kotak Bank: Gearing up for another breakout attempt with strong support holding firm.
- ICICI Bank: Entering an accumulation phase with key support levels in place, indicating a possible trend reversal.
Readers should keep a close watch on these private banking stocks. They are well-positioned for potential upside in the near term, supported by both macroeconomic factors and technical strength.
Disclaimer:
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
As per SEBI guidelines, the writer and his dependents may or may not hold the stocks/commodities/cryptos/any other assets discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
Kiran Jani has over 15 years of experience as a trader and technical analyst in India’s financial markets. He is a well-known face on the business channels as Market Experts and has worked with Asit C Mehta, Kotak Commodities, and Axis Securities. Presently, he is Head of the Technical and Derivative Research Desk at Jainam Broking Limited.
Disclosure: The writer and his dependents do not hold the stocks discussed here. However, clients of Jainam Broking Limited may or may not own these securities.
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