Why SBI struggling to give breakout? What is next?

SBI has been a major laggard within the Banking index. This stock has simply failed to participate in the entire rally of December and has been drifting lower.

Interestingly it is one of a very few stocks that is now reaching towards the spike low made on 18th December. So, why this stock has been failing?

Look at the below chart of SBI which was published today morning in our equity research report along with 60 minutes chart – The Financial Waves short term update

SBI weekly Chart:

Elliott Wave analysis:

We are showing weekly chart of SBI to see why there has been such a huge supply near the levels of 340 – 350. If you look at this chart, one can see that the high of 2010 after the financial crises was also at the same level of 340. So for an investor since 2010 this stock has not given any returns for almost 7 years now. Isn’t it interesting to see how a major PSU bank has simply failed when the economic reforms and growth has been the talk of the town.

As shown on hourly chart, (shown in actual research report)………….

Rise in SBI since the lows of 2016 has been in corrective fashion which suggests that the correction which started in 2010 is still not over and we have arrived at very important juncture.

I am sure many would have been bullish on PSU banking space but only to encounter minuscule returns compared to other outperforming stocks. We have refrained from recommending investments in this sector and it has paid out well.

So, how to form trading strategy on SBI? Please refer the morning equity research report – The Financial Waves short term update that covers Nifty, Bank Nifty and stocks research on charts using Technical analysis, Elliott wave, and crucial support &resistance levels. Subscribe annually and get flat 30% off on the product. What more get access to the Monthly research report free for 3 months which will cover indepth analysis on Bitcoin in the upcoming issue. Subscribe by visiting Pricing page and select period as 12 months, we will set you up for your 3 months of free copy of monthly research report along with it!