ICICI Bank, HDFC Bank, SBI: Trading strategies for these 3 buzzing largecap banking stocks

Indian benchmark indices experienced a mixed ending on Wednesday, despite reaching new highs earlier in the session. Profit booking towards the end of the session left the BSE Sensex marginally up by 36.45 points (0.05%) to close at 77,337.59, while the NSE Nifty50 index dropped by 41.90 points (0.18%) to settle at 23,516. Looking ahead, the upcoming budget and monsoon season are expected to be significant market drivers. Among the key sectors in focus, banking stocks like State Bank of India (SBI), ICICI Bank Ltd, and HDFC Bank Ltd are predicted to remain under trader scrutiny.

Laxmikant Shukla, a Technical Research Analyst at YES Securities, provides an in-depth analysis and trading strategies for these buzzing large-cap banking stocks:

State Bank of India (SBI)

Recommendation: Buy Target Price: Rs 910 Stop Loss: Rs 830

SBI has shown a gradual decline from Rs 912 to the Rs 731-740 range, which historical chart patterns on the daily chart suggest might be a consolidation and bottoming out phase. This range acts as a strong support base. Additionally, the Relative Strength Index (RSI) is showing an ascending trend with a bullish crossover on the daily chart, indicating potential for continued upward momentum. A decisive move above Rs 860 would signify further strengthening and could propel the stock towards the target price of Rs 910 in the coming days.

ICICI Bank

Recommendation: Buy Target Price: Rs 1,255 Stop Loss: Rs 1,090

ICICI Bank has recently exhibited a consolidation breakout accompanied by significant trading volumes, which points towards sustained momentum in the ongoing trend. The RSI reinforces this bullish sentiment by remaining consistently above the critical level of 55. The stock has established a robust foundation at the lower end around Rs 1,090, which serves as a support level and acts as a safeguard against potential downward movements. The bullish outlook is expected to continue, aiming for a target price of Rs 1,255.

HDFC Bank

Recommendation: Buy Target Price: Rs 1,750 Stop Loss: Rs 1,600

HDFC Bank is showing signs of breaking out from a prolonged consolidation phase and has managed to surpass its previous month's peak. The technical pattern suggests an immediate target of Rs 1,750. On the downside, Rs 1,600 is expected to serve as a critical support level. Technical indicators such as the MACD (Moving Average Convergence Divergence) and RSI support the bullish momentum. The MACD indicates strength while the RSI is positively poised, confirming an upward sentiment. Based on these technical indicators, it is recommended to buy HDFC Bank within the range of Rs 1,640-1,660, setting a stop loss at Rs 1,600 on a closing basis, and targeting Rs 1,750.

Market Overview

The broader market context indicates that Indian benchmark indices saw some profit booking towards the end of the session, which led to a mixed close. With the BSE Sensex closing at 77,337.59 and the NSE Nifty50 ending at 23,516, the focus now shifts to upcoming market triggers such as the budget announcement and the monsoon season. These factors are expected to play a crucial role in influencing market movements in the near term.

Conclusion

In summary, banking stocks like SBI, ICICI Bank, and HDFC Bank are positioned favorably according to technical analysis by YES Securities. With strategic target prices and stop-loss levels set, traders can consider these recommendations for potential gains. SBI is poised for a rise to Rs 910 with a strong support base around Rs 731-740. ICICI Bank is expected to continue its bullish trend aiming for Rs 1,255 with a solid support at Rs 1,090. HDFC Bank, breaking out from consolidation, targets Rs 1,750 with a critical support level at Rs 1,600.

These insights provide traders with actionable strategies to navigate the current market conditions, particularly in the banking sector, which remains under the spotlight amid broader market movements and anticipated economic developments.