Today, market witness a great buying despite of negative trading in morning hours. Sensex closed above major level of 35,000. Nifty also touched a major level of 10800 today. IT were among the top contributors to this rally. But after government annoucement on Borrowing cut up to 60 percent, a new buying interest in Banking stocks emerges. ICICI Bank, PNB, SBI were among the top contributors from banking sector. Many other banking stocks also surges more than 5 percent intraday.
In my recent post, I had given target of 10850 for Nifty which now can be achieved in this week also. I think today’s closing of Nifty and Sensex are very positive and encouraging for overall outlook of the market. In next few days, possibility of nifty to cross 10850 is higher. However, budget is also on the way. I think before release of 2018 budget, we can see maximum level of 11000 in Nifty. And most probably for long consistent buying, I believe market should consolidate within a range of 10850-11000.
In last few days, Quarterly results have also impacted overall buying in different sectors. However, one of the bank which declared a good set of quarterly numbers is available to buy at a very good price.
South Indian Bank
It is South Indian Bank which posted a profit number of more than 100 crore for October-December quarter. South Indian Bank is among the top Small Cap banks having good presence in South area side of the country. But the management focus is now focusing on expanding their reach to other parts of the country also.
Currently, stock is quoting with a P/E ratio of below 20 whereas the overall ratio of same category banks is around 30. In lower side, I believe 28 is a major support for the stock. And in higher levels, stock has potential to rally 20-25 percent easily. Therefore, I think risk-reward ratio in stock is favourable. So, investors or traders can try to buy this stock for a target of Rs 40-42 achievable in next months or maybe few weeks.
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