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A Bearish Price action saga in PSU Banks

Public Sector Banks are crumbling under bear’s grip, Shares of Major PSU banks are trading lower as they continue to take the hit post PNB Scam. As Charles Dow (the famous forefather of Technical analysis and Inventor of Dow theory) once said “Prices discount everything”, Price action of many Bank shares reflected the Bearish sentiment.

Reason? Over the Past couple of Days, many Public sector banks are reporting their exposures of Non-secured business loans. Some estimated stats are pointing out that potential value of these uncollateralized business loans around 8500 Crores. These numbers are more than enough to freak out Market participants, as a result major speculators and Investors such as FII’s – DII’s are liquidating their holdings in Banking stocks, Specifically public sector banks. Major PSU Stocks such as UCO Bank, Allahabad Bank, Bank of Baroda, Union Bank and State Bank witnessed drastic movements combined with high volatility. Bearish Price action is the common theme for these stocks on lower time frame.

Recent Bearish Price action setup of Trapped traders in Bank of Baroda Shares
A recent Trade Setup in Bank of Baroda, like these many PSU stocks can offer potential setups for short-term trading in coming weeks because of this event.

Looks like we are only seeing a tip of an iceberg! Negative theme of Non collateral business loans is just reaching the media spot light, if it intensifies then Bearish Price action will play out on PSU Bank shares for couple more weeks. Banking sector stocks are handing out excellent opportunities for Short term traders, specifically for short sellers. If you’re a fan of Market volatility this event can be a treat for you! Uncollateralized business loans are really very bad for Banks, but it can turn out good for Price action traders (If you end up trading this event well)


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About the Author:

Balaji is a Speculator, Investor and Trader (All in All!!!) and self published author. Trading in the Markets since decade, have seen more ups and downs along with institutional trader's lifestyle. He usually trades Nifty, Bank Nifty, Commodities, Futures cum Options around both Indian and global Markets. Balaji applies highly analytical and systematic Price Action strategies He blogs passionately about Trading strategies, Price Action Trading, Technical analysis, Macro events, Market setups, Financial and Economical topics. Apart from Trading and Blogging, Balaji also mentors aspiring Traders and Investors on becoming successful in highly competitive financial Markets.

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