PUBLIC SECTOR BANKS not the turn around story you are looking for !

Published: Fri, 05/05/17

     

Dear Members,

05 MAY 2017 

There has been too much enthusiasm around PSU banks lately but is this a turnaround story or just news? The elliott wave structure suggested such a move was coming early on in Jan as shown by the two posts in Jan and Feb [read below] on Oriental bank and PSU banks in general. They did slow down in April with the Nifty losing momentum but have done what they had to anyway. Reminds me of Sep-Oct of 2016 when PSU banks peaked in wave A and were going up against the market. So they tend to move up into the fag end creating a final boost of sentiment, a feeling that all is well and that a turnaround exists for the sector. Not to say that the government is not taking steps to resolve the NPA problems. The rally is one of sentiment and not an actual turnaround. Till write offs and equity dilutions have not taken place you cannot know the real book value and real valuations for these stocks. This is mere speculation. The wave structure for an A-B-C appears to have achieved the C=A target range and the best is over here.


PSU Banks Oriental PNB

I have been bearish on PSU banks for years now so even in 2014 when wave C up confirmed I did give higher targets and then turned bearish again. So I am using the chart of Oriental bank to show that in a downtrend you get large A-B-C rallies before you go lower. This has happened twice before. You cannot know this upfront till it develops. The recent fall in many PSU banks was not clearly impulsive and lacked rising volumes leading to the consideration of larger counter trend moves. This does not change the long term picture but means a new rally for the medium term.

In OBC [weekly chart below] we did not fall below 61.8% of A in wave B. So today as bank stocks continue to pace up a larger wave C up can develop. In this chart it would mean going to 171 near the upper end of the rising channel. This does not change my long term picture that these stocks are in a downtrend.

 oriental

PNB - monthly chart shows much larger counter trend moves. 2013-2014 was very complex and so marked the rise as w-x-y-x-z, a triple complex corrective rally. Note that the bear market fort PNB is now in the second X. The next move down later would be Z usually the last phase. For now the X wave is becoming larger so wave C of X can push it all the way to the upper trendline from the 2010 high near 207.

pnb


Oriental Bank

Most PSU banks have corrected around the recent results. OBC has fallen to the 40dema taking its momentum back to zero. The average at 118 is an important support for wave 5 of C up to resume. 3=1 so far, and if 5=1 then we can go to 137 in the fractal. The entire rise can fit a rising channel from 2016 that goes as far as 170. Wave 5 can be extended given that 1 and 3 are not extended waves.

obc-170217

Image

Don't WAIT for this update! GET Nifty Daily Weekly and the Monthly Long Short report and everything else directly in your mailbox

STAY AHEAD of the market turns. 3 Steps away. And WORTH many times more than what you pay.

Go here SUBSCRIBE NOW 

JOIN BUTTON

PAYPAL RECURRING 9$ PER MONTH 

 

 
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Rohit Srivastava
www.indiacharts.com
For accurate market forecasting. Market forecasting is a study of past data to assess
future probable outcomes. It is our endeavor to discuss high probability outcomes for
traders and investors. However this is not a solicitation to buy or sell stocks futures or
options or any security. Trading in any financial market should be done with sound
knowledge and the help of a qualified investment adviser. Stocks based on the Elliott
wave model are based on the Fibonacci fractal of the market and momentum indicators,
targets are based on Fibonacci maths and are only indicative of what the mathematical
model throws up. This is not a recommendation to buy/sell.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~