Bank stocks have been badly mauled in the last one to two months in the Indian bourses. An interesting correlation can be seen between the BankNIFTY index of NSE and the Assets Under Management (AUM) of Benchmark BANKNIFTY Bee in the chart below. In fact the AUM change appears to be a leading indicator for the BANKEX’s performance.
The AUM of Benchmark Nifty Bee is racing towards zero. It is likely that there will be nothing to sell soon. This will reduce selling pressure on the bank stocks in near future .
Looks like a bounce is on cards for bank stocks in the remaining part of March. Can it be traded?
1 comment:
Very interesting corelation. Two more reasons why banks should bounce. Main sellers have been FIIs. If they're still selling, mkts won't come up, forget banks. If they stop, even banks will rebound. Banks are falling due to NPA worries. If true, mkts should not rally. If they still do, NPA has to be forgotten. Reason to buy banks. :-)
Post a Comment