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SBI Share Price Action Testing the Conviction of Buyers

SBI Share prices are in uptrend since from March, Market rallied from 150.00 to 270.00 over the horizon of 7 months. Currently the price value stands at 263.00 per share. Recent RBI rate cut is a positive reason for banks, as lending grows due to lower interest rates. Merger proposal by SBI to merge six associate banks and Bharatiya mahila bank is also another reason to be optimistic on the stock to reach 300.00. Despite these fundamentals, Technical analysis is showing some flash warnings as seller’s routinely testing the conviction behind Uptrend.

Price Action Highlights The Battle of Bulls and Bears on SBI

SBI Share price action in Uptrend as per technical analysis

SBI Daily Price chart representing the Market psychology in a critical way. The Market structure is in Uptrend since from March 2016. Long term secular Trend is in side ways which is different story but an important fact to keep in mind. SBI is an Ideal stock for swing trading and positional trading; naturally its liquidity is not suitable for day trading. Market started rallying from 150.00 and took an initial pause recently at 270.00. Within the trend we can see multiple corrections, consolidations and high volatility. After crossing 200.00 resistance zone, market formed a structural price channel which represented the struggle on both sides. Soon Buying pressure absorbed the sellers at 230.00, Market rallied upside resulting in temporary imbalance.

Sellers are again interrupting the trend – formation of H & S pattern. The pattern is clearly visible on Lower time frame chart (In this case it’s 4hr chart). Buyers should absorb selling pressure to sustain the Uptrend. In any case market shouldn’t breach 250.00 support zones, there’s a possibility of Price action testing it multiple times. Stock prices may oscillate around the level, but it shouldn’t break the level as a rule of thumb. 300.00 is the next potential resistance on the upside.


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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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