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Nifty Bank hits record high above 53K, experts advise buying on dips

Bank index breaches crucial resistance level of 53,000, triggering short covering. Traders advised to go long on dips. Nifty Bank hits record high.

The banking sector witnessed a flurry of activity as HDFC Bank, Kotak Bank, Federal Bank, and Bandhan Bank saw significant buying interest, while AU Small Finance Bank experienced selling pressure. The bank index surged past the crucial resistance level of 53,000, prompting a short covering rally in the index. Analysts are advising traders to take advantage of any dips to enter long positions in the index.

The Nifty Bank soared above 53,000 for the first time, reaching new record highs on Wednesday, buoyed by positive global cues. The index closed at 53,089, marking a gain of 921 points, with an intraday high of 53,256. Meanwhile, the Nifty50 also posted gains, closing at 14,286, up by 163 points.

HDFC Bank, Kotak Bank, Federal Bank, and Bandhan Bank ended the day in positive territory, while AU Small Finance Bank faced selling pressure.

The bank index's breakthrough above 53,000 sparked a short covering rally, with experts recommending traders to consider going long on any pullbacks. Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, highlighted the strong uptrend in the Bank Nifty index, emphasizing the importance of the 52,500 support level for initiating fresh long positions.

The Nifty Bank's impressive performance, opening with a gap-up and hitting a new record high, demonstrated bullish momentum. The index's ability to close above 53,000 indicated a positive outlook for the bulls, with sellers failing to maintain downward pressure after Tuesday's session.

Patel from Tradebulls Securities noted the shift in market sentiment, with buyers pushing the Bank Nifty above 53,000 and unwinding positions between 52,500 and 53,000. The data also showed bullish sentiment in PE writing from 52,500 to 53,000, suggesting support levels at each dip towards 52,500.

Looking ahead, the next hurdle for the Bank Nifty is at 53,500, with support around 52,600 where the 5-day moving average lies. Patel reiterated the expectation of a meaningful correction only below 51,800.

In conclusion, the banking sector witnessed a strong performance, with key players like HDFC Bank, Kotak Bank, Federal Bank, and Bandhan Bank driving gains in the index. The breach of the 53,000 resistance level and the subsequent short covering rally suggest a positive outlook for traders, with opportunities to enter long positions on any pullbacks.

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